1. GDP per capita in United States was about $45,000 in 2007. What will it be in the year 2015 if GDP per capita increases each year by?
a) 0 percent
b) 2 percent
2. Sketch a production possibilities curve based on Table 1.1., labelling combinations A-F. What is opportunity cost of raising missile production?
a) From 50 to 100?
b) From 200 to 250?
All production entails the opportunity cost: We can create more of output A only if we produce less of output B. The implied diminution in output B is the opportunity cost of output A.
