The Following Production Possibilities Schedule Shows the Quantities of Soybeans

question 71

Multiple Choice

The following production possibilities schedule shows the quantities of soybeans and oil that can each be produced in Canada and Mexico with one unit of equivalent resources. TABLE 32-3 Refer to Table 32-3.The opportunity cost of a barrel of oil in Canada is

• A)16.67 bushels of soybeans.
• B)6 bushels of soybeans.
• C)2.5 bushels of soybeans.
• D)1.25 barrels of oil.
• E)0.8 barrels of oil.

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Definitions:

Average Fixed Cost

Average fixed cost is the fixed cost per unit of output, calculated by dividing total fixed costs by the number of units produced, which decreases as production increases.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced, representing the variable cost per unit of output.

Total Variable Cost

The sum of all variable costs for a given level of production or output.

Total Cost

The complete sum of money required for the production of goods or services, including expenses that stay the same and those that vary.