As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases.
B. initially decreases, then increases.
C. decreases.
D. initially increases, then decreases.
Answer: A
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Decision making on the margin involves
A) comparing the marginal cost and marginal benefits when making a decision. B) comparing the total cost and the total benefit when making a decision. C) eliminating the additional cost when making a decision. D) determining the total benefits of a decision. E) comparing the benefits from the social interest to the benefits from the person's self-interest.
About how much U.S. and European trade is intra-industry?
a. 40% b. 50% c. 60% d. 70%
The possible combinations of goods that can be purchased with a specific income are called the
A. income-consumption curve. B. marginal rate of substitution. C. budget constraint. D. indifference map.
Assuming no change in the effective tax rate on capital, an increase in the government budget deficit will reduce the current account deficit if and only if the increase in the budget deficit
A. increases desired national investment. B. increases desired national saving. C. reduces desired national saving. D. reduces desired national investment.