When constructing a production possibility curve for an economy, which of the following is assumed to be constant?
a. The quantity of resources
b. The government budget
c. The quantity of goods produced
d. The price level
e. The money supply
QUESTION 2The monopolistically competitive firm will charge a price which is more than that charged by a perfectly competitive firm.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3The tradeoffs faced by a society can be illustrated in a graph known as the:
a. production operations curve.
b. production cost curve.
c. production cost model.
d. production cost forecast curve.
e. production possibilities curve.
QUESTION 4In long-run equilibrium, each monopolistically competitive firm can earn positive economic profits due to economies of scale.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5The city of Austin can buy roads or light rail. If 10 miles of roads cost 1 million and 2 miles of light rail cost 10 million, what is the city's opportunity cost of 1000 miles of roads?
a. 100 million
b. 2 miles of light rail
c. 200 miles of light rail
d. 50 million
e. 1,000 million
QUESTION 6If new firms enter a monopolistically competitive industry, the demand facing a typical firm increases.
a. True
b. False
Indicate whether the statement is true or false
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