Why does the production possibilities frontier have a bowed out shape rather than being a straight line?
What will be an ideal response?
The fact that as the production of one good or service increases, its opportunity cost increases means that the production possibilities frontier will be bowed out. Only if the opportunity cost remained constant as the production of a good increases would the production possibilities frontier be a straight line.
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A good measure of a country's level of economic integration with a currency area is
A) the intersection of DD and GG. B) the country's price level. C) the compatibility of economic policies. D) the intersection of AA and GG. E) the extent of trade between the joining country and the currency area and the ease with which labor and capital can migrate between the joining country and the currency area.
Which of the following pieces of legislation represents a liberalization of federal land policy?
a. The Homestead Act of 1862 b. The Desert Land Act of 1877 c. The Timber and Stone Act of 1878 d. All of the above are correct. e. Only a and c are correct.
Answer the following statement(s) true (T) or false (F)
1. Near monopolists can be innovators. 2. The Sherman Antitrust Act encouraged price fixing. 3. The Clayton Act outlawed predatory pricing. 4. Price discrimination requires significant market power.. 5. College financial aid is a form of price discrimination.
Does a state sales tax function as a progressive, regressive, or proportional source of revenue, and why?
What will be an ideal response?