Figure 34-4
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In Figure 34-4, the opportunity cost of a unit of wheat in terms of cotton is
A. 1 for the United States and 5 for Egypt.
B. 20 for the United States and 2 for Egypt.
C. 1 for the United States and 2 for Egypt.
D. 20 for the United States and 10 for Egypt.
Answer: A
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The relative price of a good is that price
A) expressed in today's dollars. B) expressed in constant 2012 dollars. C) expressed in terms of the price of another good. D) that is equal to the equilibrium price.
A firm in a perfectly competitive industry
a. is unaffected by the entrance of new firms into the industry, since entering firms affect only the prices they themselves receive. b. always produces more output in the long run than in the short run. c. may choose a different output in the long run than in the short run. d. earns economic profit in the long run but not in the short run.