Farmer Fred could grow wheat and barley. He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land. The price of wheat is $2.00 per bushel and the price of barley $ 0.80 . Show the benefits to Fred from specialization. What should he specialize in?
Farmer Fred could make $150 if he grew only wheat and just $100 if he grew only barley. By specializing in wheat production he will be better off. Even though he can produce more bushels of barley than he can bushels of wheat, his opportunity cost of producing wheat (the $100 income sacrificed. is lower than the opportunity cost of producing barley ($150 in sacrificed income).
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Based on the data in the table above, the efficient level of output equals
A) 550 units. B) 600 units. C) 650 units. D) 700 units.
Consider the following economic agents: a. the government b. consumers c. producers Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?
A) the government B) producers C) consumers D) consumers and producers E) the government, consumers, and producers