Increasing opportunity cost is represented by a ________ production possibilities frontier
A) linear B) vertical C) bowed out D) bowed in
C
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A price cap regulation ________
A) is illegal B) is a price floor C) is a price ceiling D) encourages a firm to operate inefficiently
The production possibilities curve bows out because
A) production is efficient. B) of the law of increasing additional cost. C) production is inefficient. D) resources are not being fully utilized.
A perfectly competitive firm producing 100 units of output per period finds that: Average total cost is $20; Average variable cost is $12; Marginal cost is $18 and increasing; Price of the product is $15. This firm should
a. produce more output b. raise the price of its product c. reduce production without shutting down d. shut down (reduce output to zero) e. do nothing (it is currently maximizing profit)
You withdraw some of your savings to invest in a new business venture. Which of the following statements is true?
a. The return you will earn from this new investment is your opportunity cost. b. The interest rate you would have earned in the bank is higher than the return from this investment. c. The return you expect to earn from this new investment must exceed your opportunity cost. d. The return you expect to earn from this new investment must equal your opportunity cost.