Ivy Software MBA Prepworks Fundamentals of Economics questions with correct answers

The main concept demonstrated in the production possibilities frontier is - ANSWER-Opportunity cost When country A has a lower opportunity cost of producing sugar relative to country B, then country A is said to have - ANSWER-Comparative Advantage A graph that shows the combinations of two goods that the economy can produce given the available scarce resources and available technology is called a - ANSWER-Production Possibilities Frontier Assume a production possibilities frontier for pickup trucks and big Mac hamburgers. The economy is producing 20 big Mac hamburgers and 65 pickup trucks (point 20, 65). What is the opportunity cost of producing an additional 20 Big Mac hamburgers (point 40, 60)? - ANSWER-Five Pickup Trucks The opportunity cost of an item is - ANSWER-whatever must be given up to obtain the item. Consider market for pork, suppose that price of beef, a substitute for pork, increases. Because of the change in price of beef, the equilibrium price of pork...? - ANSWER-Increases Consider the market for pork, suppose that the price of beef, a substitute for pork, increases. Because of this change in the price of beef, the equilibrium quantity of pork will...? - ANSWER-Increase because increase in price of beef causes demand curve for pork to shift North East. B/c of this shift, the equilibrium quantity of pork will increase. Consider the market for pork. Suppose that the price of hog feed, an input to the production of pork, increases. Because of that change in the price of hog feed, the equilibrium quantity of pork ...? -