The table above represents five points on the production possibility frontier for the small country of Baca, which produces only rugs (measured in thousands) and wheat (measured in thousands of bushels): Does the production possibility frontier
demonstrate the law of increasing opportunity cost? How can you tell?
Yes. The opportunity cost of increasing the production of wheat rises as more wheat is produced. The opportunity cost of the first 10,000 bushels of wheat is only 5,000 rugs, but the opportunity cost of the fourth 10,000 bushels of wheat is 20,000 rugs.
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The supply of loanable funds is from
A) firms and the government if it has a budget deficit. B) households and the government if it has a budget deficit. C) firms and the government if it has a budget surplus. D) households and the government if it has a budget surplus. E) households and firms.
Corporate managers and shareholders always have the same goals
Indicate whether the statement is true or false
If net foreign investment is positive, which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)
A) Net exports are negative. B) Capital outflows are less than capital inflows. C) Domestic investment must be less than national saving. D) None of the above are true when net foreign investment is positive.
Refer to Scenario 12.2. What is the profit maximizing level of output?
A) 171.43 B) 120 C) 150 D) all of the above E) none of the above