The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What is the opportunity cost of increasing the production of rice to 15 tons?
A) 9 thousand bottles of wine
B) 12 tons of rice
C) 6 thousand bottles of wine
D) 15 thousand bottles of wine
E) Nothing, it is a free lunch.
A
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Signals solve the adverse selection problem
A) if the signal is an advertisement placed in the New York Times or other top-tier publication. B) only if the signal is viewed as credible. C) when the signal is expensive to produce. D) if the signaling firm is known to be a profit-maximizer.
Under the marginal productivity principle,
A. the marginal economic profit of all inputs is zero at their optimal levels. B. the marginal physical product of each input is equal at their optimal levels. C. the marginal revenue product of each input is equal at their optimal levels. D. the slope of the marginal revenue product curve for each input is zero at the optimal level.
An isoquant shows the various combinations of labor and capital that
a. the firm will choose to employ in the long run. b. yield the same total cost. c. can produce some fixed level of output. d. minimize the firm's average cost of production.
As an individual consumes more of a particular good, the total level of utility derived from that consumption usually
A. increases at a decreasing rate. B. increases at an increasing rate. C. increases at a constant rate. D. decreases at an increasing rate.