The Notion of Opportunity Cost Can Be Represented Graphically by the

question 227

Multiple Choice

The notion of opportunity cost can be represented graphically by the

• A)area inside the production possibilities frontier.
• B)slope of the production possibilities frontier.
• C)vertical distance from the horizontal axis to the production possibilities frontier.
• D)horizontal distance from the vertical axis to the production possibilities frontier.
• E)sum of the horizontal and vertical distances to the production possibilities frontier.

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Definitions:

Duopoly

A market structure characterized by two dominant firms controlling the majority of the market share.

Stackelberg Leader

A firm in a duopoly that maximizes its profit by making the first move and setting its output level, anticipating the response of the follower firm.

Maximize Profits

The process of making the most favorable decisions to achieve the highest possible earnings after expenses.

Conjectural Variation

An expectation of how rival firms will react to a change in the quantity and price of goods a firm markets.