Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes. The figure above illustrates his production possibilities frontier. What is Gabriel's opportunity cost of raising another 100 cows?
A) 5.0 tons of potatoes
B) 3.0 tons of potatoes
C) 1.25 tons of potatoes
D) 100 cows
E) 1.0 ton of potatoes
C
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Answer the question on the basis of the following information: Suppose a firm hires both labor (L) and capital (C) under purely competitive conditions. The price of labor is P L and that of capital is P C . The marginal product of labor is MP L and that
of capital is MP C . The firm sells its product competitively at a price of P X . Refer to the given information. Which of the following must pertain if the firm is to minimize the cost of producing any output? A. MP C = MP L = P X . B. MP C = P C and MP L = P L . C. MP C /P C = MP L /P L . D. MP C /P X = MP L /P X .
Which of the following is said to occur when a firm lowers its price to limit the decline in the quantity sold during a period of recession?
A. Persistent dumping B. Predatory dumping C. Cyclical dumping D. Seasonal dumping