Use the Following to Answer Questions

question 22

Multiple Choice

Use the following to answer questions :
Table 5-1
-Refer to Table 5-1.Suppose X costs $8 per unit and Y costs $5 per unit.What quantities of X and Y will the consumer buy if she has $31 to spend?

• A)X = 3, Y = 4
• B)X = 4, Y = 5
• C)X = 2, Y = 3
• D)X = 1, Y = 2
• E)None of the above

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Definitions:

Comparative Advantage

The ability of an individual or group to produce a good or service at a lower opportunity cost than another.

Tractors

Vehicles specially designed to deliver high torque at low speeds, used mainly in the farming industry for agricultural purposes.

Crude Oil

A crude, naturally existing petroleum substance comprising hydrocarbon deposits and miscellaneous organic materials.

Opportunity Cost

The expense incurred from overlooking the next most favorable choice during a decision-making process.