As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases.
B. initially decreases, then increases.
C. decreases.
D. initially increases, then decreases.
Answer: A
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Use the following table to answer the next question. The base year is 2007. YearHot DogsBaseballsBottles of Beer?PriceQuantityPriceQuantityPriceQuantity2005$2.50100$2.5050$1.0010020064.001005.001002.0015020075.001005.001002.0020020088.001508.002004.00200200910.0020010.002004.00250Calculate the percentage change in prices from 2007 to 2009.
A. 175% B. 200% C. 150% D. 100%
In a sense, a cartel is self-destructive because
A) it reduces consumer surplus. B) it sets price above marginal cost. C) each cartel member has the incentive to cheat on the cartel. D) each cartel member earns economic profit.
Exhibit 4-8 Demand and supply curves
In Exhibit 4-8, a movement from A to C is best described as a(n):
A. increase in the quantity supplied and a decrease in the demand. B. decrease in the quantity supplied and a decrease in demand. C. decrease in the quantity supplied and an increase in demand. D. decrease in the quantity demanded and a decrease in supply.
A good example of a monopolistic competitive industry is
A) the federal highway system. B) wheat farms in the United States. C) the country music industry. D) the four major textbook publishers together with nearly 90 percent of industry sales.