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

question 114

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.
$\begin{array}{|c|c|c|c|c|}\hline \text { Combination } & \begin{array}{c}\text { Number } \\\text { of Stealth } \\\text { Bombers }\end{array} & \begin{array}{c}\text { Opportunity cost } \\\text { of Stealth } \\\text { Bombers in } \\\text { Terms of B-1s }\end{array} & \begin{array}{c}\text { Number } \\\text { of B-1s }\end{array} & \begin{array}{c}\text { Opportunity } \\\text { Cost of B-1s in } \\\text { Terms of Stealth } \\\text { Bombers }\end{array} \\\hline \mathrm{S} & 10 & & 0 & \\\hline \mathrm{T} & 9 & & 1 & \\\hline \mathrm{U} & 7 & & 2 & \\\hline \mathrm{V} & 4 & & 3 & \\\hline\end{array}$

$\text {Table 1.1}$
$\text {Production Possibilities for Bombers}$ The lowest opportunity cost anywhere in Table 1.1 for B-1 bombers in terms of Stealth bombers is

• A)0 Stealth bombers per B
• B)2 Stealth bombers per B
• C)1 Stealth bomber per B
• D)0.5 Stealth bomber per B

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Definitions:

Marginal Cost

The cost of producing one additional unit of a product or service, a critical factor in economic decision-making.

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the cost per unit of output.

Profit-maximizing

The process or strategy of adjusting production and operation to generate the highest possible profit.

Many Buyers

A market condition characterized by the presence of numerous consumers or purchasers for goods and services.