For Each Watch Denmark Produces, It Gives Up the Opportunity

question 42

Multiple Choice

For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese.Germany can produce one watch for every 100 pounds of cheese it produces.Which of the following is true concerning production possibilities curves in both countries?

• A)The slopes of the countries' production possibilities frontiers cannot be determined unless the number of workers in each country is known.
• B)The countries' production possibilities frontiers have the usual bowed-out shape.
• C)On a graph with cheese on the vertical axis, the slope of Germany's production possibilities frontier is everywhere equal to 1/100.
• D)On a graph with cheese on the vertical axis, the slope of Germany's production possibilities frontier is steeper than Denmark's.
• E)On a graph with cheese on the vertical axis, the slope of Germany's production possibilities frontier is everywhere equal to negative 1/100.

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Definitions:

Marginal Cost

The cost change associated with making an additional unit of a product, emphasizing the incremental expense in production activities.

Total Costs

The complete cost of production that includes both fixed and variable costs.

Average Total Costs

The total cost of production divided by the total number of units produced, representing the average cost per unit of output.

Fixed Costs

Expenses that do not vary with the level of output or sales, such as rent, salaries, and insurance.