Suppose that there are two goods that a small island nation can produce – coconuts and breadfruit
If the inputs for both goods are perfectly interchangeable and there is never a rise or fall in opportunity cost explain what the production possibilities frontier should look like and why.
Production possibilities frontier are typically concave to the origin which reflects the law of increasing opportunity cost. In the present example this is not the case. The opportunity cost is constant which would lead to a downward-sloping but linear production possibilities frontier.
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The present value of a future payment to be received in three years is $1,000 . If the interest rate is 5%, what is the amount that will be paid in three years?
a. $1,150.00 b. $1,157.63 c. $1,215.51 d. $1,250.00
Exhibit 4-6 Demand and supply curves
In Exhibit 4-6, the demand curve has shifted from D1 to D2 and, simultaneously, the supply curve has shifted from S1 to S2. Describe these actions in this market.
A. Market supply has decreased, and market demand has increased. B. Market supply has increased, and market demand has decreased. C. Market supply has decreased, and market demand has decreased. D. Market supply has increased, and market demand has increased.
If the wage rate is fixed at a certain level, then MLC is equal to that wage rate
Indicate whether the statement is true or false
Rick likes to consume Coke or Pepsi. If the marginal rate of substitution of both the goods is constant, Rick's indifference curve is likely to be _____
a. a straight line b. downward sloping c. L-shaped d. U-shaped