A production possibilities frontier is a straight line when
a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good.
b. an economy is interdependent and engaged in trade instead of self-sufficient.
c. the rate of tradeoff between the two goods being produced is constant.
d. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.
c
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Using Figure 10.1 above is it possible to determine the price that this product is selling for if it is being sold in a competitive market? If so what is that price?
What will be an ideal response?
Which of the following is NOT true for monopoly?
A) The profit maximizing output is the one at which marginal revenue and marginal cost are equal. B) Average revenue equals price. C) The profit maximizing output is the one at which the difference between total revenue and total cost is largest. D) The monopolist's demand curve is the same as the market demand curve. E) At the profit maximizing output, price equals marginal cost.
Between points "b" and "c" in the above figure, the opportunity cost of 250 more bushels of corn is
A) 200 yards of cloth. B) 250 yards of cloth. C) 600 yards of cloth. D) 800 yards of cloth.
An economy consists of two goods: beef and lamb. Of all the points on this economy’s production possibilities frontier, which one is best in terms of efficiency?
What will be an ideal response?