The shape of the production possibilities frontier in Figure 3-1 implies that
A. some resources are better suited for producing wheat than for producing barley.
B. the opportunity cost of producing more wheat falls as wheat production rises.
C. the farmer’s technology is not subject to the principle of increasing costs.
D. the financial cost of producing wheat is higher than the financial cost of producing barley.
Answer: A
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Under a system of fixed exchange rates, what happens if a country's currency is undervalued?
A) The central bank loses official reserve assets. B) The central bank gains official reserve assets. C) The currency depreciates. D) The exchange rate falls.
Suppose a cup of coffee at the campus coffee shop is $2.50 and a cup of hot tea is $1.25 and that a student's beverage budget is $20 per week. What is the most cups of tea the student could buy?
a. 20 b. 16 c. 10 d. 8
Other things the same, if the dollar depreciates relative to the Japanese yen, then
A. the exchange rate falls. It will cost fewer yen to travel in the U.S B. the exchange rate falls. It will cost more yen to travel in the U.S C. the exchange rate rises. It will cost fewer yen to travel in the U.S D. the exchange rate rises. It will cost more yen to travel in the U.S
Why does economics fit well as a liberal arts education?
What will be an ideal response?