Question :
41) A small landscaping firm purchases a tractor that, in : 1384118
41) A small landscaping firm purchases a tractor that, in one day, is capable of drilling 60 fence-post holes or removing 12 tree stumps (or some intermediate combination). For this landscaper, what is the opportunity cost of removing one extra tree stump?
A) 1/12th of the cost of the tractor
B) 1/5 of the cost of the tractor
C) drilling 12 fence-post holes
D) drilling 5 fence-post holes
E) there is no opportunity cost
42) Suppose that a bakeshop with 5 employees can produce both pies and cakes. In one day, if all resources are devoted to baking pies, the shop can produce 125 pies; if all resources are devoted to baking cakes, the shop can produce 50. What is the shop’s opportunity cost of producing any one cake?
A) 0.4 pies
B) 0.25 pies
C) 2.5 pies
D) 0.4 cakes
E) 2.5 cakes
43) Suppose that a bakeshop with 5 employees can produce both pies and cakes. In one day, if all resources are devoted to baking pies, the shop can produce 125 pies; if all resources are devoted to baking cakes, the shop can produce 50. What is the shop’s opportunity cost of producing any one pie?
A) 125 pies
B) 0.4 cakes
C) 2.5 pies
D) 0.4 pies
E) 50 cakes
44) Katie and Hugh are producing pies and jars of pickles. Katie can produce either 200 jars of pickles or 100 pies per month. Hugh can produce either 800 jars of pickles or 200 pies per month. Which of the following statements is correct?
A) Katie’s opportunity cost of producing 1 jar of pickles is 2 pies.
B) Katie’s opportunity cost of producing 1 jar of pickles is 1/2 of a pie.
C) Hugh’s opportunity cost of producing 1 jar of pickles is 4 pies.
D) Hugh’s opportunity cost of producing 1 pie is 1/4 jar of pickles.
E) Hugh’s and Katie’s opportunity costs of producing are the same.
45) Suppose Andrea has a job that pays her $25 000 per year (after taxes). She is considering quitting her job and going to university full time for four years. Tuition fees and books will cost $12 000 per year. Living expenses in either situation will cost $10 000 per year. What is the opportunity cost of Andrea’s four-year university degree?
A) $88 000
B) $100 000
C) $120 000
D) $148 000
E) $188 000
46) It has been observed that university enrollment in Canada is higher during periods of high unemployment. A possible explanation for this is that
A) when prospects for getting a job are poor, the opportunity cost of getting a job is lower.
B) when prospects for getting a job are poor, the opportunity cost of doing nothing is higher.
C) during periods of high unemployment, tuition fees are reduced.
D) during periods of high unemployment, the opportunity cost is no longer relevant.
E) when prospects for getting a job are poor, the opportunity cost of going to university is lower.
47) Chantal has a full-time job as a geological engineer and earns an annual after-tax salary of $85 000. She decides to leave her job for 6 months to scuba dive on the Great Barrier Reef in Australia, and incurs costs of $7500 for course equipment and certification, $2500 for airfare, and $12 000 for regular living expenses in Australia (equal to her living expenses at home). What is Chantal’s opportunity cost for this 6-month, unpaid leave of absence?
A) $12 000
B) $22 000
C) $42 000
D) $52 500
E) $65 000
48) During economic recessions, the opportunity cost of going to university ________ because the wages a student can expect to earn working in the best alternative ________.
A) increases; decrease
B) decreases; increase
C) increases; increase
D) decreases; decrease
E) remains the same; remain the same
49) A country’s production possibilities boundary shows that
A) when a society combines its resources efficiently, it cannot produce more of one good without producing less of the other good.
B) when a society combines its resources inefficiently, it cannot produce more of one good without producing less of the other good.
C) when a society combines its resources efficiently, it is always possible to produce more of all goods.
D) all points inside the boundary are preferred to all points on the boundary.
E) the supply for goods always exceeds the demand.
50) Consider a production possibilities boundary showing the possible combinations of military goods and civilian goods that a country can produce. Suppose that the country is currently at a point on the boundary. If the production of military goods is increased, the production of civilian goods will necessarily
A) decrease.
B) remain the same.
C) increase.
D) increase at a decreasing rate.
E) increase at a increasing rate.
