Table 3-11 Assume That Falda and Varick Can Switch Between Producing Wheat

question 403

Multiple Choice

Table 3-11
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.

-Refer to Table 3-11.Falda's opportunity cost of one yard of cloth is

• A) 2/3 bushel of wheat and Varick's opportunity cost of one yard of cloth is 2/5 bushel of wheat.
• B) 2/3 bushel of wheat and Varick's opportunity cost of one yard of cloth is 5/2 bushels of wheat.
• C) 3/2 bushels of wheat and Varick's opportunity cost of one yard of cloth is 2/5 bushel of wheat.
• D) 3/2 bushels of wheat and Varick's opportunity cost of one yard of cloth is 5/2 bushels of wheat.

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Definitions:

Aggregate-Demand Curve

A graphical representation showing the relationship between the total quantity of goods and services demanded across all levels of an economy and the overall price level.

Monetary Policy

The process by which a central bank controls the supply of money in an economy, often targeting interest rates to promote economic stability.

Fiscal Policy

A government's use of spending and taxation to influence the economy.

Aggregate Demand

The aggregate requirement for products and services in an economy at a specific general price point during a certain time frame.