Choose the letter of the curve in Figure 1.2 that best represents a production possibilities curve for two goods that obey the law of increasing opportunity costs:
A. A.
B. B.
C. C.
D. D.
Answer: C
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Technological progress has made it possible for firms such as Apple and Alivecor to develop small electronic devices, including smartwatches, smartphones, and products that can be attached to the smartwatches and smartphones, to serve consumers who
have become more health conscious and wish to monitor various health conditions. These firms are reacting to which of the three key economic ideas? A) people are rational B) people respond to economic incentives C) firms attempt to maximize revenues D) optimal decisions are made at the margin
State whether each of the following goods and services is nonrival, nonexcludable or both:
a. A toll road b. A public park c. A lighthouse d. An art museum e. A radio broadcast of "A Prairie Home Companion"
An import quota will ordinarily raise the price of the good in the importing country.
Answer the following statement true (T) or false (F)
Refer to Scenario 9.10 below to answer the question(s) that follow. SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.Refer to Scenario 9.10. The economic profit is
A. -$3,600. B. -$1,200. C. $0. D. $5,400.