Assume a Society Can Produce Either Beer or Wine

question 25

Multiple Choice

Assume a society can produce either beer or wine. If the marginal rate of transformation of gallons of beer into gallons of wine is 0.5, then the opportunity cost of beer is

• A) the 2 gallons of beer that must be forgone.
• B) the 2 gallons of wine that must be forgone.
• C) the 0.5 gallons of beer that must be forgone.
• D) the additional 0.5 gallons of beer that can be produced.

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Definitions:

Opiates

A class of drugs derived from opium that are used for pain relief, but can also be addictive.

Illegal Drug

Substance whose production, sale, or possession is prohibited by law.

Judgment

The ability to make considered decisions or come to sensible conclusions.

Coordination

The organization of different elements or activities to ensure effective working together to achieve a common purpose or outcome.