Use the Following Scenario to Answer the Questions That Follow

question 106

Multiple Choice

Use the following scenario to answer the questions that follow.
Karl and Pete produce cars and trucks. Karl can produce 10 cars per hour or 5 trucks per hour. Pete can produce 12 cars per hour or 4 trucks per hour.
-Based on the scenario,Pete's opportunity cost of one car is ________ truck(s) .

• A) 2/3
• B) 1/3
• C) 3/4
• D) 4
• E) 3

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Definitions:

Trade Deficit

An excess of imports over exports.

Capital Flight

A large and sudden reduction in the investment of assets in a country, often due to political or economic instability.

Exchange Rate

The worth of one currency when converted to another.

Interest Rate

The rate at which a borrower pays interest for the money borrowed from a lender.