Britain Must Give Up the Production of 75 Hats to Produce

question 126

Multiple Choice

Britain must give up the production of 75 hats to produce 25 additional sweaters.The opportunity cost of producing 4 sweaters is _____ hats.

• A)4
• B)12
• C)71
• D)79

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Definitions:

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, used to measure inflation and purchasing power.

Aggregate Demand Curve

A curve representing the relationship between the economy’s price level and real GDP demanded per period, with other things constant.

Leading Economic Indicator

A statistic about economic activities that helps analysts and policymakers predict future economic trends and business cycles.

Economic Activity

The actions that involve the production, distribution, and consumption of goods and services within an economy.