Table 2-1 -Refer to Table 2-1. What Is the Most Accurate Statement

question 58

Multiple Choice

Table 2-1

-Refer to Table 2-1. What is the most accurate statement about the opportunity cost of producing an additional 50 computers in Erehwon?

• A) the opportunity cost of an additional 50 computers is 300 kg of cheese
• B) the opportunity cost of an additional 50 computers is 200 kg of cheese
• C) it is impossible to determine the opportunity cost of an additional 50 computers
• D) the opportunity cost of an additional 50 computers increases as more computers are produced

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Definitions:

Tax

Compulsory payments made to the government, imposed on earnings from employment and profits from businesses, or included in the price of certain goods, services, and dealings.

Arthur Laffer

An economist known for the Laffer Curve, which postulates a relationship between tax rates and tax revenue, suggesting there exists an optimal tax rate for maximizing revenue.

Tax Rates

The fraction of earnings on which a person or corporate entity must pay taxes.

Tax Revenue

The funds that governments garner from taxing activities.