Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements about opportunity cost is CORRECT?
A) The opportunity cost of a ton of pecans is 2 tons of pears per ton of pecans for Missouri and 1/4 ton of pears per ton of pecans for Washington.
B) The opportunity cost of a ton of pears is 2 tons of pecans per ton of pears for Missouri and 1/4 ton of pecans per ton of pears for Washington.
C) The opportunity cost of a ton of pecans is 1/2 ton of pears per ton of pecans for Missouri and 4 tons of pears per ton of pecans for Washington.
D) Both answers B and C are correct.
D
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Suppose there are two perfectly competitive industries with similar numbers of firms but where one industry consists of N identical firms while the second consists of N firms with differing costs. Compared to the short-run supply curve of the industry with identical firms, the short-run supply curve of the differing cost industry will tend to be
A) steeper at higher prices. B) flatter at higher prices. C) steeper at lower prices. D) flatter at lower prices.
Savings will always be set equal to investment by the _____, according to the classicals.
Fill in the blank(s) with the appropriate word(s).