Answer the following statements true (T) or false (F)

Question

1. The iso-revenue line reflects the rate at which the market is willing to substitute between two
products as their prices change.
2. The production possibilities curve reflects the different products the business can produce given
efficient use of its existing resources.
3. The slope of the production possibilities curve is called the marginal rate of technical
substitution.
4. The slope of an isoquant is called the marginal rate of product transformation.
5. The shape of the long run average cost curve is typically U-shaped in practice.

Answer 1

1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. FALSE