A production possibilities curve has "good X" on the horizontal axis and "good Y" on the vertical axis. On this diagram, the opportunity cost of good X, in terms of good Y, is represented by the:
A. distance to the curve from the horizontal axis.
B. distance to the curve from the vertical axis.
C. distance from the origin to the curve.
D. change in Y for each change in X along the curve.
Answer: D
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P-TV and QRS-TV are trying to decide whether to air a sitcom or a reality show in a given time slot. Viewers like both sitcoms and reality shows, but sitcoms are more expensive to produce than reality shows since real actors need to be hired. QRS-TV makes its decision first, and then P-TV observes that choice before making its decision. Both stations know all of the information in the decision tree below. 
In the equilibrium of this game:
A. both stations will air sitcoms. B. QRS-TV will air a reality show and P-TV will air a sitcom. C. both stations will air reality shows. D. QRS-TV will air a sitcom and P-TV will air a reality show.
All else constant, an increase in the number of buyers in the market for cell phone service would cause:
A) equilibrium price and quantity to increase. B) equilibrium price and quantity to decrease. C) equilibrium price to increase and equilibrium quantity to decrease. D) equilibrium price to decrease and equilibrium quantity to increase.
The forces of supply and demand assure that
a. demand curves and supply curves tend to shift to the right as time goes by. b. the price of a good will eventually rise in response to an excess demand for that good. c. when the supply curve for a good shifts, the demand curve for that good shifts in response. d. the equilibrium price of a good will be rising more often than it will be falling.
According to international trade theory
A) trade is based on absolute advantage. B) comparative advantage is based on absolute advantage. C) every country has a comparative advantage in something. D) less developed countries cannot trade successfully with developed countries.