In the above figure, at point b what is the opportunity cost of producing 2 more audio tapes?
A) 1/2 video tape per audio tape
B) 1 video tape per audio tape
C) 6 video tapes per audio tape
D) There is no opportunity cost.
A
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Banks can make loans as long as they have
A) deposits. B) reserves. C) required reserves. D) excess reserves. E) excess government securities.
You have 40,000 frequent flier miles. You could exchange your miles for a round trip ticket to Bermuda over spring break. Does that mean your flight to Bermuda would be free? Explain your reasoning
What will be an ideal response?
Consider the following statement, "The Federal Reserve fights recessions by increasing the money supply so people will have more money to spend." What is wrong with the statement and how can it be corrected?
What will be an ideal response?
Which of the following thoughts do the Keynesian and the new Keynesian economists share?
a. The belief that wages and prices are not flexible in the short run b. The belief that the aggregate supply curve is always a horizontal line c. The belief that the government's role in the economy should be minimized d. The belief that the natural rate of unemployment in an economy is always zero e. The belief that prices are constant and that changes in aggregate expenditures determine equilibrium real GDP