The concave shape of the production possibilities frontier reflects
a. the law of comparative advantage
b. the law of absolute advantage
c. the law of increasing opportunity cost
d. the simplifying assumption of scarce resources
e. productive inefficiency
C
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The value added of a producer is the
A) total amount for which all its products sell minus its change in inventories. B) value of its total sales once externalities are accounted for. C) value of its output minus the value of the inputs it purchases from other producers. D) quality-adjusted amount of its total sales less any commissions paid.
When choosing the production level for tomorrow you find that at an output of 100 units, the total variable costs are $20,000 and the average fixed cost is only $50 . If the market price is $200, you should:
a. b or e. b. shut down. c. produce more than 100 units. d. produce fewer than 100 units. e. produce where MC = MR.
If the price level in an economy rises and its output level decreases as it gravitates toward its potential GDP, then: a. a policy to manipulate the aggregate supply is being used
b. an active approach to correcting a recessionary gap is being used. c. an active approach to correcting an expansionary gap is being used. d. a passive approach to correcting a recessionary gap is being used. e. a passive approach to correcting an expansionary gap is being used.
Suppose a concert by Rihanna and a basketball game played by the Houston Rockets are substitutes, then which of the following is TRUE?
A. If the price of a ticket to a Rockets game decreases, then the demand for Rihanna tickets will fall. B. The price of a ticket to a Rockets game will always equal the price of a ticket to a Rihanna concert. C. If the price of a ticket to a Rockets game increases, then the demand for Rihanna tickets will remain unchanged. D. If the price of a ticket to a Rockets game increases, then the demand for Rihanna tickets will fall.