Table 3-7 Assume That Japan and Korea Can Switch Between Producing Cars

question 340

Multiple Choice

Table 3-7
Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate.

-Refer to Table 3-7.Japan's opportunity cost of one airplane is

• A) 1/5 car and Korea's opportunity cost of one airplane is 1/3 car.
• B) 1/5 car and Korea's opportunity cost of one airplane is 3 cars.
• C) 5 cars and Korea's opportunity cost of one airplane is 1/3 car.
• D) 5 cars and Korea's opportunity cost of one airplane is 3 cars.

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Definitions:

Monopolistic Competitors

Firms operating in a market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power.

Minimum ATC

The lowest point on the Average Total Cost curve, where a firm is most efficient in its production.

Monopolistically Competitive

A market structure characterized by many sellers offering similar but not identical products, allowing for some control over pricing and competition based on product differentiation.

Zero Economic Profits

A situation where a firm's total revenues exactly equal its total costs, including opportunity costs, resulting in neither economic profit nor loss.