Maximum Feasible Hourly Production Rates of EitherComputers or Bicycles Using All Available ResourcesProductUnited StatesCanadaComputers810Bicycles42Refer to the above table. Assuming constant opportunity costs, the opportunity cost of producing a bicycle in the United States is ________ while the opportunity cost of producing a bicycle in Canada is ________.
A. 2 computers; 5 computers
B. 5 computers; 2 computers
C. 8 computers; 10 computer
D. 4 computers; 10 computers
Answer: A
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In each of the following cases, identify whether a competitive firm's producer surplus will increase, decrease, or remain unchanged
i. The demand for the product increases ii. The firm's marginal cost of production increases iii. The market price of the product falls
The benefit of a subsidy paid on each unit sold will go entirely to the sellers in the market if
A) the supply curve is perfectly inelastic. B) if the subsidy is paid to producers. C) the demand curve is perfectly elastic. D) the supply is perfectly elastic.
A star basketball player signs a contract that newspaper reports say is worth $20 million. The player receives $5 million on signing, and $5 million a year for three years. The contract is worth
A) $20 million as reported in the papers. B) less than $20 million since the present value of $5 million received one or more years from now is less than $5 million. C) more than $20 million because the present value of $5 million received one or more years from now is more than $5 million. D) either more or less than $20 million, depending on the value of the discount rate.
A manager invests $400,000 in a technology that should reduce the overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85 . After the investment has been made, the $400,000 investment is
a. Considered sunk costs, not relevant in further decision making b. Considered sunk costs, but still relevant in further decision making c. Considered a loss d. Considered a profit