Exhibit 2-2 Production possibilities curve
In Exhibit 2-2, the slope of the production possibilities curve indicates that the opportunity cost of:
A. coffee is constant.
B. coffee is increasing.
C. coffee is decreasing.
D. corn is increasing.
Answer: A
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Refer to Scenario 1. What is the marginal product of the third hour of labor?
A) 60 B) 80 C) 100 D) 240
Recall the Added Perspective on the prisoner's dilemma. When there is a prisoner's dilemma,
a. the prisoners stick to a joint strategy b. each prisoner's best strategy is not to confess c. the prisoners must make a once-and-for-all decision d. game theory does not apply e. there is no mutual interdependence
Refer to the accompanying figure. Suppose the solid line represents the current supply of Star Wars action figures. If retailers learn that a new Star Wars movie will be released in several months, this news is likely to cause:
A. neither a change in supply nor a change in quantity supplied since only future demand will change. B. a decrease in the quantity supplied, but no change in current supply. C. current supply to shift to S(B) in anticipation of higher future prices. D. current supply to shift to S(A) in anticipation of higher future prices.
Based on the graph showing equilibrium output and price for a monopolist, profits stop growing when production goes beyond which point?
a. QD
b. Q1
c. Q2
d. QM