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Question
Figure 2-10
Figure 2-10 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey.
Refer to Figure 2-10. What is the opportunity cost of producing one gallon of honey in Tahiti?
A) 5/6 gallon of milk
B) 0.9 gallon of milk
C) 1.2 gallons of milk
D) 1 1/3 gallons of milk
Answer
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Related questions
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Suppose two countries use different combinations of inputs, such as labor and capital, to produce the same product. This implies all of the following except that
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B) the relative input prices.
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An expansion path shows
A) the level of sales necessary for a firm if it wants to expand.
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Maximizing the level of output for a given total cost of production
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Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest per year. In her first year, Golda spent $18,000 to rent a salon, hired a part-time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material. Based on this information, what is the amount of her implicit costs?
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Q:
Which of the following would be categorized as an opportunity cost?
a. not being able to spend your $10,000 savings if you sink the money in your business
b. the cost of purchasing supplies for your house-cleaning business
c. the cost of purchasing auto insurance for your dry-cleaning delivery business
A) a only
B) a and c only
C) b and c only
D) all of the above