A production possibilities curve is negatively sloped because:
a. the price of a good falls as you move down along the curve
b. resources are wasted as you move along the curve.
c. it is not possible to adjust production decisions at all once an economy operates on the curve.
d. once on the frontier, it is only possible to increase production of one good by reducing production of the other.
d
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How is monopoly different from perfect competition?
A.In a monopoly, there is only one seller, who can set prices as he chooses. In perfect competition,firms have some control over prices, but not as much as monopoly.. B.In a monopoly, there is only one seller, who can set prices as he chooses. In perfect competition,firms are price takers. C.In a monopoly, there is more than one seller, but they can set prices as they choose.In perfect competition, firms are price makers. D.In a monopoly, they are always protected by government barriers, whereas in a perfectively competitivecompany, they have no such protection.
Price-taking producers have horizontal marginal revenue curves.
Answer the following statement true (T) or false (F)
Refer to Scenario 16.3. What is the relative price of tee shirts to candy?
A) $2.25 B) $2 C) $1.40 D) The relative price will be between $2.25 and $1.40. E) It is impossible to determine.
Assume the prices of labor and capital remain the same, but the average educational level of workers decreases and therefore labor productivity decreases. This would lead a firm to
A. use a more labor-intensive technology. B. use a more capital-intensive production technology. C. not change its production technology, but produce fewer units of output. D. use only capital to produce the product.