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Unformatted text preview: ho keeps his savings in an old coffee can. (Use the following table to answer questions 25–26.) Shown below are the production possibilities between milkshakes and ice cream. Milkshakes Ice Cream (in dozens) (in pounds) 2000 0 1600 400 1200 750 800 950 400 1100 0 1200 25. The marginal opportunity cost of producing milkshakes A. is unrelated to the amount of milkshakes produced. B. increases as more milkshakes are produced. C. decreases as more milkshakes are produced. D. is constant as more milkshakes are produced. 26. What is the opportunity cost of increasing the production of milkshakes from 400 dozen to 1200 dozen? A. 1100 pounds of ice cream B. 950 pounds of ice cream C. 350 pounds of ice cream D. 400 pounds of ice cream E. 750 pounds of ice cream 27. Purdue Federal Credit Untion (PFCU) expects inflation to be 3%, and thus charges a nominal interest rate of 9%. If inflation is actually 1% over the period of the loan, then the actual real interest rate is ________ than the expected real interest rate. Th...
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- Fall '08