In an Israeli factory, each worker can produce 2/5 of a shirt in an hour or 1/10 of a pair of pants in an hour. If there are 500 workers in the factory, what is opportunity cost of producing one shirt?
a. 1 pair of pants
b. 4 pairs of pants
c. 1/2 pair of pants
d. 1/4 pair of pants
e. 2 pairs of pants
D
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If there is a change in the U.S. endowment of factors of production, then there would be
A) shifts in just SRAS. B) a movement along the SRAS curve. C) a shift in both LRAS and SRAS. D) a shift in just LRAS.
Assuming a worker's money wage rose from $10 per hour to $20 per hour while all product price have doubled, then in the classical model, this worker would
a. supply more labor after the wage increase. b. supply less labor after the wage change. c. supply the same amount of labor after the hourly wage increase. d. demand less leisure.
Assume that the opportunity cost for Germany to produce a jet is 50 cars. If Germany is producing on its production Possibility Frontier, some possible combinations of output for Germany could be:
A. (1,000 jets, 5,000 cars) and (900 jets, 10,000 cars). B. (1,000 jets, 5,000 cars) and (900 jets, 15,000 cars). C. (2,500 jets, 2,000 cars) and (2,300 jets, 20,000 cars). D. (2,500 jets, 2,000 cars) and (2,300 jets, 3,000 cars).
To simplify the analysis of demand shocks in an open, two-economy, short-run model, we assume all of the following EXCEPT:
a. fixed prices and wages. b. levels of government spending and taxes; foreign GDP and foreign rates of interest are given. c. no net unilateral transfers or foreign factor income. d. foreign GDP and foreign rates of interest are constant.