What does a production possibility frontier represent?
What will be an ideal response?
A production possibility frontier is a graph that shows all of the combinations of goods and services that can be produced if all of society's resources are used efficiently.
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If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):
a. upward movement along the supply curve for cigarettes. b. rightward shift of the supply curve for cigarettes. c. downward movement along the demand curve for cigarettes. d. leftward shift of the supply curve for cigarettes.
Productive efficiency occurs in perfect competition because the firm produces at the minimum of the: a. average fixed cost curve
b. average variable cost curve c. average total cost curve d. marginal revenue curve.
The graph of the production function plots total cost versus quantity of output
a. True b. False Indicate whether the statement is true or false
If a monopolist had a zero marginal cost of production, it would maximize profits by choosing to produce a quantity where ______.
a. demand was inelastic b. demand was unit elastic c. demand was elastic d. It is impossible to determine where along a demand curve such a monopolist would choose to produce.