Briefly describe the difference between a straight line production possibilities curve and a convex production possibilities curve.
What will be an ideal response?
A straight line production possibilities curve means that the opportunity cost is constant. A convex production possibilities curve means that the opportunity cost for one product increases for each unit produced of the other product.
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Even today, individuals distrust the outcome of free markets, as is evidenced by the protests against the construction of Walmarts across the nation
Indicate whether the statement is true or false
Suppose the government of New Country has fixed the value of its currency, the New Peso, at $1 per New Peso, but the market equilibrium value of the New Peso is $0.50 per New Peso. In order to maintain the official value of the New Peso the Central Bank of New Country must either ________ domestic interest rates, or ________ the supply of international reserves by purchasing New Pesos.
A. lower; decrease B. raise; increase C. lower; increase D. raise; decrease
Federal deposit insurance is currently capped at $100,000 per account.
Answer the following statement true (T) or false (F)
If different people own the different stages of production of a commodity, a contract or market relationship helps to minimize transaction risks and creates economic value
Indicate whether the statement is true or false