If He Devotes All of His Available Resources to Cantaloupe

question 105

Multiple Choice

If he devotes all of his available resources to cantaloupe production,a farmer can produce 120 cantaloupes.If he sacrifices 1.5 watermelons for each cantaloupe that he produces,it follows that

• A)if he devotes all of his available resources to watermelon production,then he can produce 80 watermelons.
• B)he cannot have a comparative advantage over other farmers in producing cantaloupes.
• C)his opportunity cost of one watermelon is 2/3 of a cantaloupe.
• D)his production possibilities frontier is bowed-out.

---

Definitions:

Future Value

The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.

Retirement Income

The total income a person receives after retiring from work, which can come from pensions, savings, investments, and social security benefits.

Compounded Semi-Annually

Interest added to the principal of a deposit or loan every six months, affecting total interest earned or paid.

Periodic Interest Rate

The interest rate applied to a loan or savings account over a specific period of time, often monthly or annually.