Micro Final

(Exam 2, Q2) Refer to table 7-1. If the price of the product is $122, then the total consumer surplus is A. $28 B. $41 C. $43 D. $405

$41

Table 13-7 (Exam 3, Q5) What is the value of N? a. $50 b. $140 c. $360 d. $410

$50

Country A's tax system is more efficient than Country's B tax system if A. Country A collects less tax revenue than Country B, and the cost to taxpayers is the same in both countries B. County A collects more tax revenue than Country B, even though the cost to taxpayers is greater in Country A than in Country B C. the same amount of revenue is raised in both countries, but the cost to taxpayers is smaller in Country A than in Country B D. the same amount of revenue is raised in both countries, but the taxes are collected in a shorter amount of time in Country A than Country B

the same amount of revenue is raised in both countries, but the cost to taxpayers is smaller in Country A than in Country B

Which of these statements best represents the law of demand? A. When buyers' tastes for a good increase, they purchase more of the good B. when income levels increase, buyers purchase more of most goods C. When the price of a good decreases, buyers purchase more of the good D. buyers' demands for a good increase, the price of the good increases

when the price of a good decreases, buyers purchase more of the good

Which of these terms are used interchangeably? A. "goods and services" and "inputs" B. "goods and services" and "factors of production" C. "inputs" and " factors of production" D. "land, labor, and capital" and "goods and services"

"inputs" and "factors of production"

Scenario 14-1 (Exam 3, Q10) At Q=999, the firm's total costs equal a. $10, 985 b. $10,990 c. $10,995 d. $10,999

$10, 985

(Exam 2, Q7) Refer to figure 7-14. If the government imposes a price ceiling of $50 in this market, then the new producer surplus will be A.$200 B. $100 C. $125 D. $250

$100

Scenario 14-1 (Exam 3, Q11) At Q=999, the firm's total profit equal a. $993 b. $997 c. $1003 d. $1007

$1003

Figure 15-7 (Exam 3, Q16) A profit-maximizing monopolist would earn profits of a. $96 b. $117 c. $120 d. $126

$120

Kelly is willing to pay $5.20 for a gallon of gasoline The price of gasoline at her local gas station is $3.80. If she purchases ten gallons of gasoline, then Kelly's consumer surplus is A. $1.40 B. $14 C. $3.80 D. $52

$14

(Exam 1, Q37) Refer to Figure 5-14. Over which range is the supply curve in this figure the most elastic? A.$16 to $40 B. $40 to $100 C. $100 to $220 D. $220 to $430

$16 to $40

The table describes the police protection demands for three equal sized groups of people in Safetyville. The second, third, and fourth columns show the number of person-hours of police protection per day that a group will demand for a given price (the first column) (Exam 2, Q34) Refer to Table 11-3. What is the value of the 99th unit police protection in Safetyville? A. $0 B. $6 C. $12 D. $18

$18

Leonard, Sheldon, Raj, and Penny each like to attend comic-book conventions. The price of a ticket to a convention is $50. Leonard values a ticket at $70, Sheldon at $65, Raj at $60, and Penny at $55. Suppose that if the government taxes tickets at $5 each, theprice will rise to $55. A consequence of the tax is that consumer surplus shrinks by A. $50 and tax revenues increase by $20, so there is a deadweight loss of $30 B. $30 and tax revenues increase by $20, so there is a deadweight loss of $10 C. $20 and tax revenue increase by $20, so there is no deadweight loss D. $50 and tax revenues increase by $20, so there is no deadweight loss

$20 and tax revenues increase by $20, so there is no deadweight loss

(Exam 1, Q39) Refer to Figure 6-18. The price that buyers pay after the tax is imposed is A. $8 B. $10 C. $14 D. $24

$24

(Exam 1, Q30) Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament, what will be the equilibrium price? A. $10 B. $15 C. $20 D. $25

$25

(Exam 2, Q27) Refer to Figure 10-19. Note that the lines labeled "Demand" and "Social Value" are parallel. Also, the slopes of the lines on the graph reflect the following facts: (1) Private value and social value decrease by $1 with each additional unit of the good that is consumed, and (2) private cost increases by $1.40 with each additional unit of the good that is produced. This, when the 59th unit of the good is produced and consumed, social well-being increases by A. $28 B. $31.40 C. $33.60 D. $36

$33.60

Table 13-6 (Exam 3, Q3) Each worker at the Wooden Chair Factor costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 70 chairs per hour and operates 8 hours per day, what is the factory's total labor cost per day? a. $72 b. $112 c. $576 d. $616

$576

(Exam 1, Q40) Refer to Figure 6-18. The per-unit burden of the tax on sellers is A. $6 B. $8 C. $10 D. $14

$6

(Exam 2, Q6) Refer to figure 7-11. If the supply curve is S1, the demand curve is D, and the equilibrium is $150, what is the producer surplus? A. $625 B. $1,250 C. $2.500 D. $5,000

$625

(Exam 2, Q21) Refer to Figure 10-2. The private value of the 200th unit of plastic exceeds the social cost of the 220th unit of plastic by A. $4 B. $8 C. $12 D. $16

$8

A taxpayer faces the following tax rates on her income. 20% of the first $40,000 of her income. 30% of all her income above $40,000. At what level of income would the taxpayer's marginal tax rate by 30% and her average tax rate be 25%? A. $42,000 B. $57,000 C. $60,000 D. $80,000

$80,000

Table 14-6 (Exam 3, Q7) What is the total revenue from selling 7 units? a. $120 b. $490 c. $562 d. $840

$840

The figure illustrates the market for calculators in a country (Exam 2, Q19) Refer to Figure 9-2. Without trade, producer surplus is A. $423 B. $845 C. $1,590 D. $3,380

$845

(Exam 2, Q25) Refer to Table 10-5. If the government wanted to reduce pollution from 16 units to 6 units, which of the following fees per unit of pollution would achieve that goal? A. $75 B. $87 C. $99 D. $106

$87

(Exam 2, Q26) Refer to Table 10-5. If the government wanted to eliminate exactly 11 units of pollution, which of the following fees per unit of pollution would achieve that goal? A. $75 B. $87 C. $99 D. $106

$87

Which of the following expressions is valid for the price elasticity of demand? A. (Q1+Q2)/[(Q2-Q1)/2] / (P1+P2)/[(P2-P1)/2] B. (Q1-Q2)/[(Q2+Q1)/2] / (P1-P2)/[(P2+P1)/2] C. (P1+P2)/[(P2-P1)/2} / (Q1+Q2)/[(Q2-Q1)/2] D. (P1-P2)/[(P2+P1)/2] / (Q1-Q2)/[(Q2+Q1)/2]

(Q1-Q2)/[(Q2+Q1)/2] / (P1-P2)/[(P2+P1)/2]

Figure 15-4 (Exam 3, Q15) Profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at (i) Q1 (ii) Q2 (iii) Q3 (iv) Q4 a. (ii) only b. (i) or (ii) only c. (i) only d. (i), (ii), and (iii) only

(i) or (ii) only

A market is competitive if (i) firms have the flexibility to price their own product (ii) each buyer is small compared to the market (iii) each seller is small compared to the market a. (i) and (ii) only b. (i) and (iii) only c. (ii) and (iii) only d. (i), (ii), and (iii)

(ii) and (iii) only

Economists normally assume that the goal of a firm is to (i) sell as much of its product as possible (ii) set the price of the product as high as possible (iii) maximize profit a. (i) and (ii) only b. (ii) and (iii) only c. (iii) only d. (i), (ii), and (iii)

(iii) only

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is a. - $120.00 b. - $75.40 c. -$0.40 d. $75.40

- $75.40

If a 20% increase in price for a good results in a 15% decrease in quantity demanded, the price elasticity of demand is A. 0.75 B. 1.25 C. 1.33 D. 1.6

0.75

(Exam 1, Q13) Refer to Figure 3-14. If the production possibilities frontier shown for Lisa is for 4 months of work, then how long does it take Lisa to produce one jacket? A. 1/4 month B. 1/2 month C. 2 months D. 4 months

1/4 month

If price elasticity of supply is 0.4, and a price increase led to a 5% increase in quantity supplied, then the price increase is about A. 0.25% B. 1.2% C. 2% D. 12.5%

12.5%

Refer to Table 3-14. (Exam 1, Q10) Assume that Nick and Faldo each has 2 hours available. IF each person divides his time equally between the production of wheat and cloth, then total production is A. 8 bushels of wheat and 15 yards of cloth B. 14 bushels of wheat and 27 yards of cloth C. 16 bushels of wheat and 30 yards of cloth D. 28 bushels of wheat and 34 yards of cloth

14 bushels of wheat and 27 yards of cloth

Table 13-6 (Exam 3, Q4) What is the total output when 5 workers are hired? a. 30 b. 160 c. 190 d. 215

190

(Exam 2, Q24) Refer to Table 10-1. What is the socially-optimal quantity of output in this market? A. 1 unit B. 2 units C. 3 units D. 4 units

2 units

(Exam 1, Q17) Refer to Table 3-21. Suppose Jamaica decides to increase it production of radios by 12. What is the opportunity cost of this decision? A. 3 coolers B. 6 coolers C. 12 coolers D. 24 coolers

24 coolers

Figure 16-2 (Exam 3, Q18) The firm's profit-maximizing level of output is a. 16 units b. 24 units c. 32 units d. 48 units

24 units

(Exam 1, Q14) Refer to Figure 3-14. If Lisa and Bryce both spend all their time producing jackets, then total production is A. 2 Jackets B. 6 Jackets C. 24 Jackets D. 26 Jackets

26 jackets

(Exam 2, Q23) Refer to Table 10-1. What is the equilibrium quantity of output in the market? A. 2 units B. 3 units C. 4 units D. 5 units

3 units

Table 14-8 (Exam 3, Q8) The firm should not produce an output level beyond a. 4 units b. 5 units c. 6 units d. 7 units

5 units

Refer to Table 2-1. (Exam 1, Q6) If the production possibilities frontier is bowed outward, then "?" could be A. 400 B. 450 C. 600 D. 750

750

(Exam 1, Q34) Refer to Figure 4-27. Panel (b) shows which of the following A. a decrease in demand and a decrease in quantity supplied B. a decrease in demand and a decrease in supply C. a decrease in quantity demanded and a decrease in quantity supplied D. a decrease in quantity demanded and a decrease in supply

A decrease in demand and a decrease in quantity supplied

When the government attempts to improve equality in an economy the result is often? A. an increase in overall output in the economy B. an additional government in revenue since overall income will increase C. a reduction in equality D. a reduction in efficiency

A reduction in efficiency

Figure 15-4 (Exam 3, Q14) The demand curve for a monopoly firm is depicted by curve a. A b. B c. C d. D

B

(Exam 2, Q40) Refer to Table 12-22. A regressive tax is illustrated by tax A. A only B. B or D C. C only D. A or D

B or D

Tom produces baseball gloves and baseball bats. Steve also produces baseball gloves and baseball bats, but Tom is better at producing both goods. In this case, trade could A. benefit both Steve and Tome B. Benefit Steve, but not Tom C. benefit Tom, but not Steve D. Benefit neither Steve nor Tom

Benefit both Steve and Tom

Which of the following statements is correct? A. Buyers Determine supply, and sellers determine demand B. Buyers determine demand, and sellers determine supply C. Buyers determine both demand and supply D. Sellers determine both demand and supply

Buyers determine demand, and sellers determine supply

The unique point at which the supply and demand curves intersect is called A. market harmony B. coincidence C. equivalence D. Equilibrium

Equilibrium

T or F: Efficiency means everyone in the economy should receive an equal share of the goods and services produced

False

Which of the following are phrases best captures the notion of efficiency? A. absolute fairness B. Equal distribution C. minimum waste D. a reduction in efficiency

Minimum Waste

Because public goods are A. excludable, people have an incentive to be free riders B. excludable, people do not have the incentive to be free riders C. not excludable, people have an incentive to be free riders D. not excludable, people do not have an incentive to be free riders

Not excludable, people have an incentive to be free riders

In a competitive market, each seller has limited control over the price of his product because A. other sellers are offering similar products B. Buyers exert more control over the price than do sellers C. these markets are highly regulated by the government D. sellers usually agree to set a common price that will allow each seller to earn a comfortable profit

Other sellers are offering similar products

The vertical distance between points A and C represents a tax in the market (Exam 2, Q11) Refer to figure 8-3. The per unit burden of the tax on buyers is A. P3-P1 B. P3-P2 C. P2-P1 D. P4-P3

P3-P2

Figure 16-2 (Exam 3, Q19) Suppose that average total cost is $36 when Q=24. What is the profit-maximizing price and resulting profit? a. P=$24, profit= $0 b. P=$36, profit=$144 c. P=$36, profit=$48 d. P=$36, profit=$0

P=$36, profit=$0

Assume the supply curve for diapers is a typical, upward-sloping straight line, and the demand curve for diapers is a typical, downward-sloping straight line. Suppose the equilibrium quantity in the market for diapers is 1,000 per month when there is not tax. Then a tax of $0.50 per diaper is imposed. The effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by sellers falls from $1.50 to $1.40. The government's tax revenue amounts to $465 per month. Which of the following statements is correct? A. After tax is imposed, the equilibrium quantity of diapers is 900 per month B. The demand for diapers i s more elastic than the supply of diapers C. The deadweight loss of the tax is $12.50 D. The tax causes a decrease in consumer surplus of $380

The deadweight loss of the tax is $12.50

Canada and the US both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if A. Canada requires fewer resources than the US to produce a bushel of wheat B. the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the US C. the opportunity cost of producing a bushel of wheat is lower for the US than it is for Canada D. the US has an absolute advantage over Canada in producing computer software

The opportunity cost of producing a bushel of wheat is lower for Canada than it is for the US

Suppose a tax is imposed on bananas. In which of the following cases will the tax cause the equilibrium quantity of bananas to shrink by the largest amount? A. the response of buyers to a change in the price of bananas is strong, and the response of sellers to a change in the price of bananas is weak B. The response of sellers to a change in the price of bananas is strong, and the response of buyers to a change in price of bananas is weak C. The response of buyers and sellers to a change in the price of bananas is strong D. The response of buyers and sellers to a change in the price of bananas is weak

The response of buyers and sellers to a change in the price of bananas is weak

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that A. ken has absolute advantage in chairs B. Ken has comparative advantage in tables C. Traci has absolute advantage in chairs D. Traci has comparative advantage in chairs

Traci has an absolute advantage in chairs

A city street is A. always a public good, whether or not it is congested B. a public good when in is congested, but it is a common resource when it is not congested. C. a common resource when it is congested, but is a public good when it is not congested D. always a common resource, whether or not it is congested

a common resource when it is congested, but it is a public good when it is not congested

Which of the following is an example of a payroll tax? A. a tax on the wages that a firm pays its workers B. a "sin" tax on distilled alcohol C. a tax on corporate profits D. the portion of federal income taxes earmarked to pay for national defense

a tax on the wages that firm pays its workers

If a surplus exists in a market, then we know that the actual price is A. above the equilibrium price, and quantity supplied is greater than quantity demanded B. above the equilibrium price, and quantity demanded is greater than quantity supplied C. Below the equilibrium price, and quantity demanded is greater than quantity supplied D. below the equilibrium price, and quantity supplied is greater than quantity than quantity demanded

above the equilibrium price, and quantity supplied is greater than quantity demanded

After a binding price floor becomes effective, a A. smaller quantity of the good is bought and sold B. a larger quantity of the good is demanded C. a smaller quantity of the food is supplied D. All of the above is correct

all of the above is correct

A supply curve slopes upward because A. as more is produced, total cost of production falls B. An increase in input prices increases supply C. the quantity supplied of most goods and services increases over time D. an increase in price gives producers the incentive to supply a larger quantity

an increase in price gives producers the inventive to supply a larger quantity

If the demand for a product increase, then we would expect equilibrium price A. to increase and equilibrium quantity to decrease B. to decrease and equilibrium quantity to increase C. and equilibrium quantity both to increase D. and equilibrium quantity both decrease

and equilibrium quantity both to increase

Total Revenue Equals a. price x quantity b. price/ quantity c. (price x quantity) - total cost d. output - input

price x quantity

A monopoly market is characterized by a. many buyers and sellers b. "natural" products c. barriers to entry d. a Nash equilibrium

barriers to entry

Producer surplus measures the A. benefits to sellers of participating in a market B. costs to sellers of participating in a market C. price that buyers are willing to pay for sellers' output of a good or service D. benefit to sellers of producing a greater quantity of a a good or service than buyers demand

benefits to sellers of participating in a market

A surplus results when a A. nonbinding price floor is imposed on a market B. nonbinding price floor is removed from a market C. binding price floor is imposed on a market D. binding price floor is removed from a market

binding price floor is imposed on a market

Positive statements are A. Prescriptive B. claims about how the world should be C. claims about how the world is D. made by economists speaking as policy advisers

claims about how the world is

Normative statements are A. not usually made by economists B. claims about how the world should be C. claims about how variables in the economy normally behave D. Pessimistic interpretations of the economy

claims about how the world should be

(Exam 2, Q31) Refer to Figure 11-1. The box labeled C represents A. private goods B. club goods C. common resources D. public goods

common resources

Goods that are rival in consumption include both A. club goods and public goods B. public goods and common resources C. common resources and private goods D. private goods and club goods

common resources and private goods

(Exam 1, Q22) The movement from point A to point B on the graph is caused by a(n) A. increase in price B. Decrease in price C. Decrease in the price of substitute good D. Increase in income

decrease in price

(Exam 1, Q26) Refer to Figure 4-14. Which of the following best describes the movement from E1 to E2? A. decrease in supply B. increase in supply C. a movement along the supply curve D. decrease in demand

decrease in supply

The simplest type of oligopoly is a. monopoly b. duopoly c. monopolistic competition d. oligopolistic competition

duopoly

The figure illustrates the market for coffee in Guatemala (Exam 2, Q17) Refer to Figure 9-1. With trade, Guatemala will A. export 22 units of coffee B. export 10 units of coffee C. import 30 units of coffee D. import 12 units of coffee

export 22 units of coffee

Pete is a non-union employee at the Electric Co. The majority of the employees at The Electric Co. are unionized. The union at The Electric Co. has negotiated very good benefits. Even though he is not a union member and he does not have to pay union dues, Pete receives all the benefits that the union has negotiated. Pete's behavior is an example of A. rivarly B. a barrier to entry C. free riding D. Taft-Hartley opposition

free riding

Pat calculates that for every extra dollar she earns, she owes the government 40 cents. Her total income now is $44,000, on which she pays taxes of $11,000. Determine her average tax rate and her marginal tax rate. A. Her average tax rate is 40% and her marginal tax rate is 25% B. Her average tax rate is 40% and her marginal tax rate is 40% C. Her average tax rate is 25% and her marginal tax rate is 25% D. Her average tax rate is 25% and her marginal tax rate is 40%

her average tax rate is 25% and her marginal tax rate is 40%

A country has a comparative advantage in a product if the world price is A. lower than that country's domestic price without trade B. higher than that country's domestic price without trade C. equal to that country's domestic price without trade D. Not subject to manipulation by organizations that govern international trade

higher than that country's domestic price without trade

The figure represents the relationship between the size of a tax and the tax revenue raised by that tax (Exam 2, Q15) Refer to Figure 8-23. If the economy is at point B on the curve, then an increase in the tax rate will A. increase in the deadweight loss of tax and increase tax revenue B. increase the deadweight loss of tax and decrease tax revenue C. Decrease the deadweight loss of tax and increase tax revenue D. decrease the deadweight loss of the tax and decrease tax revenue

increase the deadweight loss of the tax and decrease tax revenue

If an increase in income decreases the demand for a good, then the good is a(n) A. substitute good B. complementary good c. normal good d. inferior good

inferior good

(Exam 2, Q22) Refers to Figure 10-3. The social cost curve is above the supply curve because A. it takes into account the external costs imposed on society by the concert B. it takes into account the effect of local noise restrictions on concerts in parks surrounded by residential neighborhoods C. concert tickets are likely to cost more than the concert actually costs the organizers D. residents in the surrounding neighborhoods get to listen to the concert for free

it takes into account the external costs imposed on society by the concert

The profit-maximizing rule for a firm in a monopolistically competitive market is to always select the quantity at which a. marginal revenue is equal to marginal cost b. average total cost is equal to marginal revenue c. average total cost equal to price d. average revenue exceeds average total cost

marginal revenue is equal to marginal cost

Production is efficient if the economy is producing at a point A. on the production possibilities frontier B. Outside the production possibilities frontier C. On or inside the production possibilities frontier D. Inside the production possibilities frontier

on the production possibilities curve

(Exam 1, Q38) Refer to Figure 6-11. A binding price ceiling is shown in A. panel (a) only B. panel (b) only C. both panel (a) and panel (b) D. neither panel (a) nor panel (b)

panel (b) only

A good is excludable if A. one person's use of the good diminishes another person's enjoyment of it B. the government can regulate its availability C. it is not a normal good D. people can be prevented from using it

people can be prevented from using it

Suppose Iceland goes from being an isolated country of being an exporter of coats. As a result, A. consumer surplus increase for consumers of coats in Iceland B. producer surplus increases for producers of coats in Iceland C. total surplus remains unchanged in the coat market in Iceland D. it is reasonable to infer that other countries have a comparative advantage over Iceland in coat production

producer surplus increase for producers of coats in Iceland

When the government intervenes in markets with externalities, it does so in order to A. increase production when negative externalities are present B. protect interest of bystanders C. make certain all benefits are received by marker participants D. reduce production when positive externalities are repesent

protect the interests of bystanders

The price elasticity of demand measures how much A. quantity demanded responds to a change in price B. quantity demanded responds to a change in income C. price responds to a change in demand D. demand responds to a change in supply

quantity demanded responds to a change in price

Music CDs are normal goods. What will happen to the equilibrium price and quantity of music CDs if musicians accept lower royalties, CD players become cheaper, more firms start producing music CDs, and music lovers experience an increase in income? A. price will fall, and the effect on quantity is ambiguous B. price will rise, and effect on quantity is ambiguous C. quantity will fall, and the effect on price is ambiguous D. quantity will rise, and the effect on price is ambiguous

quantity will rise, and the effect on price is ambiguous

When a tax is levied on a good, the buyers and sellers of the good share the burden, A. provided the tax is levied on the sellers B. provided the tax is levied on the buyers C. provided a portion of the tax is levied on the buyers, with the remaining portion levied on the sellers D. regardless of how the tax is levied

regardless of how the tax is levied

(Exam 2, Q3) Refer to table 7-4. If you have a ticket that you sell to the group in an auction, what will be the selling price? A. slightly more than $20 B. slightly more than $25 C. slightly more than $50 D. slightly more than $60

slightly more than $50

The smaller the price elasticity of demand, the A. more likely the product is a luxury B. smaller the responsiveness of quantity demanded to a change in price C. more substitutes the product has D. greater the responsiveness of quantity demanded to a change in price

smaller the responsiveness of quantity demanded to a change in price

The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $145, 000. Because of this information, in the short run, the Brookside Racquet Club should a. shut down b. exit the industry c. stay open because shutting down would be more expensive d. stay open because the firm is making an economic profit

stay open because shutting down would be more expensive

(Exam 2, Q13) Refers to Figure 8-14. Which of the following combinations will maximize the deadweight loss from a tax? A. supply 1 and demand 1 B. Supply 2 and demand 2 C. supply 1 and demand 2 D. supply 2 and demand 1

supply 2 and demand 2

(Exam 2, Q10) Refer to figure 8-1. The area measured by K+L represents A. tax revenue B. consumer surplus before the tax C. producer surplus after the tax D. total surplus before tax

tax revenue

The government's benefits from a tax can be measured by A. consumer surplus B. producers surplus C. tax revenue D. All of the above are correct

tax revenue

Suppose Larry, Moe, and Curly are bidding in a auction for a mint-condition video of Charlie Chaplin;s first movie. Each has in mind a maximum amount that he will bid. This maximum is called A. a resistance price B. willingness to pay C. consumer surplus D. producer surplues

willingness to pay

Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate (Exam 1, Q12) Refer to Table 3-5. Which of the following represents Aruba's production possibilities frontier when 100 labor hours are available (graphs on test) A. x=2; y=5 B. x=5; y=2 C. x=50; y=20 D. x=200; y=500

x=50; y=20