Table 3-27 Assume That Huang and Min Can Switch Between Producing Parasols

question 524

Multiple Choice

Table 3-27
Assume that Huang and Min can switch between producing parasols and producing porcelain plates at a constant rate.
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-Refer to Table 3-27. The opportunity cost of 1 plate for Min is

• A)1/3 parasol.
• B)1/2 parasol.
• C)2 parasols.
• D)3 parasols.

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Definitions:

Marginal Cost

The growth in aggregate costs resulting from the manufacture of an additional product or service unit.

Externalities

Economic side effects or consequences of commercial activities that affect other parties without being reflected in the costs of the goods or services involved.

Efficient Level

The efficient level refers to the optimal point of production or service provision where the cost of resources is minimized and the satisfaction or benefit to consumers is maximized.

Impose a Tax

The act of a government or authority setting a financial charge or levy upon a taxpayer.