If He Devotes All of His Available Resources to Cantaloupe

question 105

Multiple Choice

If he devotes all of his available resources to cantaloupe production,a farmer can produce 120 cantaloupes.If he sacrifices 1.5 watermelons for each cantaloupe that he produces,it follows that

• A)if he devotes all of his available resources to watermelon production,then he can produce 80 watermelons.
• B)he cannot have a comparative advantage over other farmers in producing cantaloupes.
• C)his opportunity cost of one watermelon is 2/3 of a cantaloupe.
• D)his production possibilities frontier is bowed-out.

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Definitions:

Price Ceiling

A government-imposed limit on how high the price of a product can be charged in the market to protect consumers from excessive prices.

Government

The organization that governs or administers a specific territory or country, responsible for creating and enforcing laws, policies, and regulations.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a particular price.

Rent Controls

Government-imposed maximum rents to cap how much landlords can charge tenants, intended to make housing more affordable.