Suppose an American Worker Can Make 20 Pairs of Shoes

question 74

Multiple Choice

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for Canada is:

• A) 2 apples for each pair of shoes.
• B) 2 pairs of shoes for each apple.
• C) ½ apple for each pair of shoes.
• D) ½ pair of shoes for every 2 apples.

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Definitions:

Consumer Sovereignty

The determination by consumers of the types and quantities of goods and services that will be produced with the scarce resources of the economy; consumers’ direction of production through their dollar votes.

Legislation

Laws or legal statutes passed by a legislative body, governing body, or the process of enacting laws.

Market System

An economic system in which decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand.

Private Ownership

The holding of property by non-governmental legal entities or individuals, allowing control and use of the property according to the owner's preferences.