Macroeconomics: Chapter 1 - TestBank

26) Refer to Table 1-1. Which of the following statements about Tristan's and Thomas's opportunity costs
is correct?
A) Tristan has a higher opportunity cost of producing mowed lawns.
B) Thomas has a higher opportunity cost of producing mowed lawns.
C) Tristan has a higher opportunity cost of producing fishing lures.
D) Thomas has a higher opportunity cost of producing fishing lures.
E) Both A and D are correct.
Answer: E
Diff: 3
Topic: 1.1c. opportunity cost
Skill: Applied
Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the
production possibilities boundary.
User1: Table
User2: Qualitative

, Madeleine allows herself $100 per month for purchasing coffee. The diagram below illustrates the choices available to
her in each month.




FIGURE 1-3

27) Refer to Figure 1-3. For Madeleine, the opportunity cost of one regular coffee is
A) 1/4 of a regular coffee.
B) 20 lattes.
C) 4 lattes.
D) 1/4 of a latte.
E) 80 lattes.
Answer: D
Diff: 2
Topic: 1.1c. opportunity cost
Skill: Applied
Learning Obj.: 1-1 Explain the importance of scarcity, choice, and opportunity cost, and how each is illustrated by the
production possibilities boundary.
User1: Graph
User2: Quantitative