Refer to the graph below.
In which curve does the opportunity cost of an additional unit of good Y decrease as more units of good Y are produced?
A. A
B. B
C. C
D. D
Answer: D
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When the good on the horizontal axis is a composite good, the slope of the budget constraint is minus the price of the good on the vertical axis.
Answer the following statement true (T) or false (F)
Within the financial services industry, which of the following is an example of a financial institution?
A. Pension funds B. Thrifts C. Insurance companies D. All of these
If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to hand your business down to your children (and this "bequest" goes on forever), then a Nash equilibrium is for each firm to:
A. always advertise. B. advertise until the rival does not advertise, and then not advertise forever. C. not advertise until the rival does, and then to advertise forever. D. never advertise.
An entrepreneur is an individual who sees an opportunity to sell an item at a price higher than the average total cost of producing it.
Answer the following statement true (T) or false (F)