Refer to the scenario above. The opportunity cost of producing one pound of oranges in Beta is:
A) 1/2 pounds of apples. B) 5 pounds of apples.
C) 2 pounds of apples. D) 1 pound of apples.
C
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What is a market failure?
A) It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal private cost. B) It refers to a breakdown in a market economy because of widespread corruption in government. C) It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost. D) It refers to a situation where an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event.
Graphically, the trend line for the nominal mortgage rate coincides with the trend line for the real mortgage rate if the rate of inflation is zero
a. True b. False Indicate whether the statement is true or false