A production possibilities curve that is bowed out represents the case of
A) constant costs.
B) increasing costs.
C) decreasing costs.
D) internal costs.
E) external costs.
B
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In a perfectly competitive market the term "price taker" applies to
A) sellers but not buyers. B) only the smallest sellers and buyers. C) buyers but not sellers. D) sellers and buyers.
If two countries engage in Free Trade following the principles of comparative advantage, then
A) neither relative prices nor relative marginal costs (marginal rates of transformation-MRTs) in one country will equal those in the other country. B) both relative prices and MRTs will become equal in both countries. C) relative prices but not MRTs will become equal in both countries. D) MRTs but not relative prices will become equal in both countries. E) trade will be unrestricted, regardless of relative costs and MRTs.
Absolute advantage is the ability to produce a good using fewer inputs than another producer.
Answer the following statement true (T) or false (F)
In an oligopoly industry, price:
a. will be lower than the competitive price, due to cost savings. b. will exceed the monopoly price, due to the destructiveness of competitive forces. c. cannot be predicted exactly, because it is likely to lie between the competitive and monopoly prices. d. none of these.