Which of the following is not a basic question that each economy must answer?
A) Which resources are scarce?
B) For whom shall the goods be produced?
C) How shall goods be produced?
D) What goods shall be produced?
If Kim can either wash 10 cars or wax 2 cars during a day, and Vince can either wash 17 cars or wax 2 cars during a day, then according to the law of comparative advantage,
A) Vince's opportunity cost of waxing a car is less than Kim's.
B) their total output can be expanded if Kim specializes in waxing and Vince in washing.
C) their total output can be expanded if Kim specializes in washing and Vince in waxing.
D) it would be impossible for Vince and Kim to increase their total output through specialization and mutual exchange.
The following question(s) relate(s) to the material in the addendum to Chapter 2. Use the production possibilities data for Lebos and Slavia below to answer the question(s).
Lebos | Slavia |
Food | Clothing | Food | Clothing |
0 | 8 | 0 | 8 |
2 | 6 | 1 | 6 |
4 | 4 | 2 | 4 |
6 | 2 | 3 | 2 |
8 | 0 | 4 | 0 |
Refer to Table 2-4. Which of the following is correct?
A) In Lebos, the opportunity cost of producing one unit of food is equal to one unit of clothing.
B) In Slavia, the opportunity cost of producing one unit of food is equal to two units of clothing.
C) The opportunity cost of producing food in Lebos is less than the opportunity cost of producing food in Slavia.
D) All of the above are correct.
Which of the following is NOT true of opportunity cost?
A) Opportunity costs are subjective because they depend upon how the decision-maker values his or her options.
B) Opportunity costs are only the monetary costs of lost options.
C) Opportunity costs are the highest-valued alternative sacrificed in order to choose an option.
D) Only the decision-maker can determine his or her opportunity costs for any particular action.
Assume the demand curve for...