(Table: Econoland and Macroland Annual Production Capacity in Tons) Based

question 70

Multiple Choice

(Table: Econoland and Macroland Annual Production Capacity in Tons) Based on the table, which statement correctly identifies opportunity costs? $$\begin{array} { | l | l | l | } \hline & \text { Cabbages } & \text { Oranges } \\\hline \text { Econoland } & 50,000 & 40,000 \\\hline \text { Macroland } & 80,000 & 72,000 \\\hline\end{array}$$

• A) Macroland's opportunity cost for producing cabbages is 0.625% of Econoland's.
• B) Econoland's opportunity cost for producing cabbages is 1.6 tons of oranges.
• C) Macroland's opportunity cost for producing oranges is 1.11 tons of cabbage.
• D) Econoland's opportunity cost for producing oranges is 0.556% of Macroland's.

Relate macroeconomic policies and political stability to interest rates, exchange rates, and net exports.

Understand the relationship between real interest rates, net capital outflow, and exchange rates.

Evaluate the role and interaction of government budget deficits, investment, and savings in shaping economic outcomes.

Understand the concept and implications of "what-is-beautiful-is-good" stereotype.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing more accurate budgeting and variance analysis.

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Variable Cost

Costs that vary directly with the level of production output or volume, such as raw materials and direct labor.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours worked, multiplied by the standard labor rate.