A (very, very small) country produces milk and shirts and its production possibilities frontier is in the table above. The nation is currently producing at point B
What is the opportunity cost of two additional gallons of milk? At point C? At point D? What do your results show?
At point B, the opportunity cost of 2 additional gallons of milk is 20 shirts per gallon of milk. At point C, the opportunity cost of 2 additional gallons of milk at 30 shirts per gallon of milk. At point D, the opportunity cost of 2 additional gallons of milk is 40 shirts per gallon of milk. The opportunity cost of 2 additional gallons of milk increases as more milk is produced.
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Refer to the above figure. The firm is currently producing at Q2. The firm should
A) reduce production. B) leave production as it is. C) increase production. D) shut down.
If the U.S. dollar depreciates against the euro, it will be more expensive for European countries to purchase U.S.-made products.
Answer the following statement true (T) or false (F)