See the production possibility tables for Marketopia and Econlandia below.MarketopiaEconlandiaCookiesPiesCookiesPies018091012306206603300900Given this information, we know that the opportunity cost of producing pies
A. is higher in Marketopia.
B. is the same in both countries.
C. is higher in Econlandia.
D. cannot be computed without further information.
Answer: C
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Government failure refers to
a. a mismatch between employer incentives and firm objectives b. the failure of government to provide an efficient quantity of public goods c. the inability of firms to produce output efficiently d. the overabundance of competitors with government in production e. the under-allocation of tax revenues
A decline in interest rates tends to expand the economy by
a. encouraging private investment and decrease in bank lending. b. appreciating the currency and lowering the profitability criterion for investments. c. decreasing the cost of capital and reducing net exports. d. depreciating the currency and raising net exports.
Other things constant, a decrease in the demand for hair dryers will
a. increase the price of hair dryers. b. increase the quantity supplied of hair dryers. c. increase the demand for hair dryer manufacturing workers. d. decrease the demand for hair dryer manufacturing workers.
Describe the three different reasons that investment can rise. Explain how one of these three changes could be undesireable in terms of promoting the economic health and strength of the economy