Suppose That Opportunity Costs Are Constant and That Fred Can

question 64

Multiple Choice

Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can either produce a maximum of eight pies or two cakes in a day. Ethel's opportunity cost to produce one cake is

• A) one-half pie.
• B) two pies.
• C) six pies.
• D) four pies.

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Definitions:

Priority Rule

A principle used to establish the order of importance or precedence among several claims or interests against the same asset or legal right.

Artisan's Lien

A legal claim allowing a worker or service provider to retain possession of a client's property until payment for services rendered on that property is received.

Involuntarily

Occurring without the person's willing agreement or consent.

Possession

Possession refers to the act of having or holding property in one's power or control, whether owned or not.