Suppose a gardener produces both tomatoes and squash in his garden. If the opportunity cost of one bushel of squash is 2/5 bushel of tomatoes, then the opportunity cost of 1 bushel of tomatoes is
a. 2/5 bushel of squash.
b. 5/2 bushels of squash.
c. 2 bushels of squash.
d. 5 bushels of squash.
b
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Producers favor a ________ because ________
A) price ceiling; the equilibrium price increases B) price support; the deadweight loss is minimized C) price ceiling; total revenue increases D) price support; total revenue increases E) price ceiling; consumer surplus increases
In order to represent a consumer's choices on a graph, we draw her budget constraint as well as her __________ curves
Fill in the blank(s) with correct word
There is an increase in the money supply and the interest rate does not change. This is what happens if
A) investment is interest-insensitive. B) a liquidity trap exists. C) activist monetary policy is used instead of nonactivist monetary policy. D) wages and prices are flexible. E) none of the above
The marginal cost of providing another viewer with access to HBO is zero. Since only people who pay for HBO can watch it:
A. HBO will not be profitable in the long run. B. more than the socially optimal number of people will have access HBO. C. access to HBO is nonexcludable. D. fewer than the socially optimal number of people will have access to HBO.