If the Production Possibilities Frontier Between Two Goods Were a Straight

question 27

Multiple Choice

If the production possibilities frontier between two goods were a straight line, then the opportunity cost of one good in terms of another would be

• A) constant.
• B) zero.
• C) increasing.
• D) decreasing.
• E) either constant, increasing or decreasing, but more information is needed to determine which.

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Definitions:

Output

The amount of goods or services produced by a business, industry, or country.

Profit-Maximizing Rule

A principle that firms apply to determine the level of output at which they will realize the maximum possible profits.

Short-Run Monopoly

A scenario where a single supplier dominates the market for a brief period, often due to patents, resources, or technology.

Marginal Revenue

The additional income earned by selling one more unit of a product.