Consider Two Points on a PPF: Point A,at Which There

question 131

Multiple Choice

Consider two points on a PPF: point A,at which there are 500 oranges and 100 apricots,and point B,at which there are 501 oranges and 95 apricots.If the economy is currently at point B,the opportunity cost of moving to point A is

• A) 5 apricots.
• B) 1 orange.
• C) 95 apricots.
• D) 500 oranges.

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity demanded at the market price.

Upward-Sloping Demand

A representation typically contrary to the law of demand, suggesting that as prices increase, the quantity demanded also increases. Generally, this is indicative of Giffen or Veblen goods.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, leading to market balance.

Velcro

A fastening device consisting of two strips of fabric, one covered with tiny hooks and the other with a dense pile, which adhere when pressed together.