Opportunity Cost

Emily receives a quarterly clothing allowance of $500 from her employer. She uses this money to buy shoes and clothes that she needs for her job as a public relations officer. If each pair of shoes costs $100, what is the maximum number of pairs of shoes that Emily could buy per quarter?

1. 4 pairs of shoes

2. 5 pairs of shoes 
3. 6 pairs of shoes
4. 7 pairs of shoes

Emily receives a quarterly clothing allowance of $500 from her employer. She uses this money to buy shoes and clothes that she needs for her job as a public relations officer. If each pair of shoes costs $100 and each piece of clothing costs $50, which of the following combination of shoes and clothes is affordable given Emily’s $500 budget?

1. 2 pairs of shoes and 10 clothes

2. 3 pairs of shoes and 4 clothes

3. 4 pairs of shoes and 4 clothes

4. 5 pairs of shoes and 2 clothes

Which of the following situations would most likely cause the PPF to shift outward?

1. Increase in domestic consumption

2. Decrease in imports

3. Increase in investment spending

4. Increase in production factors

What is opportunity cost?

1. 1. It is the cost of getting one thing

   2. It is the thing one has to sacrifice to get another.

   3. It is the actual price of a thing

   4. It is the expected price of a thing

1. What is tradeoff?

   1. It is the process of sacrificing something for another thing. 

   2. It is the cost of getting one thing

   3. It is the thing one has to sacrifice to get another.

   4. It is the thing one expects to sacrifice to get another thing.

Emily receives a quarterly clothing allowance of $500 from her employer. She uses this money to buy shoes and clothes that she needs for her job as a public relations officer. If each pair of shoes costs $100 and each piece of clothing costs $50, which of the following combinations of shoes and clothes presents the most efficient use of Emily's $500 budget?

1. 1. 2 pairs of shoes and 4 clothes

   2. 3 pairs of shoes and 6 clothes

   3. 2 pairs of shoes and 6 clothes

   4. 5 pairs of shoes and 2 clothes

Emily receives a quarterly clothing allowance of $500 from her employer. She uses this money to buy shoes and clothes that she needs for her job as a public relations officer. If each piece of clothing costs $50, what is the maximum number of clothes that Emily could buy per quarter?

1. 1. 10 clothes

   2. 12 clothes

   3. 14 clothes

   4. 8 clothes

What is the difference between the budget constraint and a PPF?

What is the production possibilities frontier?

What is a budget constraint?

The PPF can be described as a ____ curve/line.

3. 1. Vertical 

   2. Horizontal 

   3. Convex 

   4. Concave

What happens to the opportunity cost of obtaining one good as you move along the PPF?

1. 1. It increases

   2. It decreases

   3. It stays the same

   4. It exactly doubles in value

Which of the following situations would most likely cause the PPF to shift inward?

1. 1. Increase in domestic consumption

   2. Decrease in production factors

   3. Decrease in imports

   4. Increase in investment spending

Which of the following is not an example of the opportunity costs of immediately studying in college?

1. Foregone income

2. Opportunity to travel freely

3. Getting a college degree

What is the difference between tradeoff and opportunity cost?