The following graph shows the production possibilities curve for the economy with only two members, Silvia and Art. Silvia can produce either 50 pounds of beef or 2 computers per week, and Art can produce 100 pounds of beef or 1 computer per week. Both of them work 40 weeks per year.
Art's opportunity cost of producing one pound of beef is ________ computer(s).
A. 100
B. 50
C. 1/100
D. 1/50
Answer: C
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Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table below shows the reservation prices of the eight students enrolled in the class.StudentReservation Price($/Book)Q60R54S48T42U36V30W24X18 How many books will Campus Books sell if it must charge a single price to all of its customers?
A. 5 B. 7 C. 3 D. 4
Goods that can be produced at a constant or very gently rising opportunity cost have
A) an elastic demand. B) an inelastic demand. C) an inelastic supply. D) an elastic supply. E) a unit elastic demand.
Suppose the market-clearing price of wheat is $2.50 per bushel. At a price below $2.50,
A) supply would equal demand. B) quantity supplied would equal quantity demanded. C) quantity supplied would exceed quantity demanded. D) quantity supplied would be less than quantity demanded.
In the Keynesian model, portfolio decisions of individuals determine the
A) inflation rate. B) money supply. C) interest rate. D) GDP.