What are the three decisions that all firms must make?
What will be an ideal response?
(1.) How much output to supply.
(2.) How to produce that output.
(3.) How much of each input to demand.
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Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties. If he now produces 35 bow ties and 15 neckties, what is the opportunity cost of producing an additional 15 neckties?
A) 2 bow ties B) 15 bow ties C) 20 bow ties D) 35 bow ties
Everything else constant, who is least likely to lose from unexpected inflation?
a. A retired person whose pension payments are fixed in dollars b. A person with a large amount of money deposited in a savings account c. A bank scheduled to receive fixed nominal mortgage payments d. A homeowner scheduled to make fixed nominal mortgage payments e. A consumer who spends extra time shopping for the lowest prices
The production possibility model can be used to demonstrate the concept of opportunity cost.
Answer the following statement true (T) or false (F)
If demand is highly inelastic and supply shifts to the right, the equilibrium price will rise significantly while quantity will increase only slightly.
Answer the following statement true (T) or false (F)