Table 11 Shows the Hypothetical Trade-Off Between Different Combinations of Stealth

question 131

Multiple Choice

Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S.capacity, ceteris paribus.Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers.
$\begin{array}{|c|c|c|c|c|}\hline \text { Combination } & \begin{array}{c}\text { Number } \\\text { of Stealth } \\\text { Bombers }\end{array} & \begin{array}{c}\text { Opportunity cost } \\\text { of Stealth } \\\text { Bombers in } \\\text { Terms of B-1s }\end{array} & \begin{array}{c}\text { Number } \\\text { of B-1s }\end{array} & \begin{array}{c}\text { Opportunity } \\\text { Terms of B-1s in } \\\text { Bombers }\end{array} \\\hline \mathrm{S} & 10 & & 0 & \\\hline \mathrm{T} & 9 & & 1 & \\\hline \mathrm{U} & 7 & & 2 & \\\hline \mathrm{V} & 4 & & 3 & \\\hline\end{array}$
Table 1.1
Production Possibilities for Bombers On the basis of your calculations in Table 1.1, what is the opportunity cost of producing at point S rather than point T?

• A) 1 Stealth bomber.
• B) 1 B
• C) 10 Stealth bombers.
• D) 0.9 Stealth bombers.

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Definitions:

Synergistic Gains

Benefits that result from the combination of two firms or entities, often leading to an increase in efficiency or value.

Acquisition

The process of obtaining control of another corporation or asset.

Divest

To sell off assets, investments, or divisions of a company, often for financial, ethical, or strategic objectives.

Newly Merged Firm

A company that has recently completed a merger, combining assets, liabilities, and operations with another firm.