Assume That the Opportunity Cost for Germany to Produce a Jet

question 105

Multiple Choice

Assume that the opportunity cost for Germany to produce a jet is 50 cars.If Germany is producing on its production Possibility Frontier,some possible combinations of output for Germany could be:

• A) (1,000 jets, 5,000 cars) and (900 jets, 10,000 cars).
• B) (1,000 jets, 5,000 cars) and (900 jets, 15,000 cars).
• C) (2,500 jets, 2,000 cars) and (2,300 jets, 20,000 cars).
• D) (2,500 jets, 2,000 cars) and (2,300 jets, 3,000 cars).

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Definitions:

Income Effect

The change in an individual's or economy's income and how that change affects the quantity demanded of a good or service.

Price Decrease

A reduction in the cost of a good or service, which can increase consumer demand but may decrease supplier profits.

Consumer's Optimal

The point at which the combination of goods and services purchased by a consumer provides maximum satisfaction or utility, given the consumer's income and the prices of goods.

Price of Good

The amount of money required to purchase a specific good or service.