Table 3-2 Assume That Aruba and Iceland Can Switch Between Producing Coolers

question 68

Multiple Choice

Table 3-2
Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.

-Refer to Table 3-2.Aruba's opportunity cost of one cooler is

• A) 0.4 radio and Iceland's opportunity cost of one cooler is 0.25 radio.
• B) 0.4 radio and Iceland's opportunity cost of one cooler is 4 radios.
• C) 2.5 radios and Iceland's opportunity cost of one cooler is 0.25 radio.
• D) 2.5 radios and Iceland's opportunity cost of one cooler is 4 radios.

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Definitions:

Monopoly Profits

Extraordinary profits earned by a monopoly due to its unique position of having no competition, allowing for higher prices and lower production.

Miracle Drug

A term for a medication that has an unexpectedly profound and beneficial effect on patients.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Market Rate

The going rate or typical price of goods, services, or interest rates in the open market.