Suppose That in an Hour Joe Can Prepare 10 Sandwiches

question 97

Multiple Choice

Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is

• A) 2 pizzas.
• B) 1/2 pizza.
• C) 5 pizzas.
• D) 1 pizza.

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Definitions:

Liquidity Preference Theory

A theory suggesting that people prefer to hold their wealth in liquid form for ease of transactions and as a precaution against uncertainty, influencing interest rates.

Demand for Money

The need or desire to hold money as opposed to investing or spending it, influenced by factors such as interest rates and economic stability.

Liquidity Preference

The desire of consumers and businesses to hold onto cash or easily convertible assets rather than making long-term investments or transactions.

Supply and Demand

The fundamental economic model for price determination in a market, describing the relationship between the quantity of a good that producers wish to sell at various prices and the quantity that consumers wish to buy.