The Shape of the Production Possibilities Frontier in Figure 3-1

question 250

Multiple Choice

The shape of the production possibilities frontier in Figure 3-1 implies that

• A) some resources are better suited for producing wheat than for producing barley.
• B) the opportunity cost of producing more wheat falls as wheat production rises.
• C) the farmer's technology is not subject to the principle of increasing costs.
• D) the financial cost of producing wheat is higher than the financial cost of producing barley.

Recognize the fundamental causes and effects of barriers to entry in creating monopolies.

Describe how exclusive rights and ownership contribute to monopoly power.

Explain the constraints on monopolists' profit-making capabilities.

Understand the effects of monopolistic production choices on revenue and profit maximization.

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