The Slope of a Linear Production Possibilities Curve with Trade

question 56

Multiple Choice

The slope of a linear production possibilities curve with trade is given by the

• A)opportunity costs of the product in each country.
• B)relative price-the number of units of good A that can be obtained for one unit of good B.
• C)ratio of productivity of workers in two countries.
• D)ratio of the elasticities of the product demand curves.
• E)rise over run of a country's average total cost curve.

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Definitions:

Regressive

Describes a tax or policy that disproportionately affects lower-income individuals, typically by taking a larger percentage of their income.

Payroll Tax

Burdens placed on employers along with their employees, customarily determined as a percentage of the staff's wages.

Corporate Profits Tax

A tax imposed on the income or profit of corporations.

Long Run

A time frame where every element of production and expenses can vary, enabling complete adaptation to any shifts.