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Refer to the figure above to answer this question. What is the total opportunity cost of producing the first 2 tonnes of butter? |
| | A) | 2 guns |
| | B) | 18 guns |
| | C) | 20 guns |
| | D) | The answer cannot be determined from the information given |
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Refer to the figure above to answer this question. If new technology increased the output of guns by 50 percent, how many guns could be produced if 6 tonnes of butter were produced? |
| | A) | 18 guns |
| | B) | 20 guns |
| | C) | 15 guns |
| | D) | 10 guns |
| | E) | 0 guns |
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Which of the following statements is implied by a straight-line production possibilities curve? |
| | A) | The law of increasing cost does not apply. |
| | B) | The resources being used are homogeneous. |
| | C) | The two goods being produced are very similar. |
| | D) | The opportunity cost of both goods is constant. |
| | E) | All of the above are correct. |
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Which of the following statements describes the law of increasing costs as it relates to the whole economy? |
| | A) | As the quantity produced of any particular item decreases, its per-unit cost of production rises. |
| | B) | As the quantity produced of any particular item increases, its per-unit cost of production rises. |
| | C) | The prices of consumer goods and services always rise and never fall. |
| | D) | If you wait to make a purchase, you will pay a higher price. |
| | E) | The total cost of production rises as output goes up. |
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Which of the following statements is correct for a society that emphasizes the production of capital goods over that of consumer goods? |
| | A) | The society could enjoy the same quantity of capital goods and a larger quantity of consumer goods in the future. |
| | B) | The society will have to save more now, compared with a society that did not emphasize the production of capital goods. |
| | C) | The society could enjoy the same quantity of consumer goods and a larger quantity of capital goods in the future. |
| | D) | The society will grow faster than a society that emphasizes the production of consumer goods. |
| | E) | All of the above are correct. |
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