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.

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Definitions:

Close Substitutes

Goods or services that can serve as replacements for each other with minimal difference in utility for the consumer.

Oligopolistic

Describing a market structure dominated by a few large producers or sellers who have significant control over prices and market share, often resulting in limited competition.

Monopolistic

Relates to a market structure where a single firm dominates the market, often leading to limited competition.

Differentiate Products

The strategy of distinguishing a product from its competitors through design, features, branding, or quality.