If the Production Possibilities Frontier for Two Goods Is Shown

question 73

Multiple Choice

If the production possibilities frontier for two goods is shown as a straight line, this implies that

• A)there is no trade-off between the two goods.
• B)the principle of increasing costs is present.
• C)the slope of the production possibilities frontier is increasing.
• D)there are no specialized resources used in the production of these goods.

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Definitions:

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in a market, often to maximize their profits illegally or unethically.

Collusive Agreements

Arrangements or agreements, often illegal, between competing firms to limit competition, control prices, or divide markets among themselves.

Cartel

A formal agreement among competing firms to control the market for a certain product by setting prices, limiting supply, or other restrictive practices.

Cartel

An association of manufacturers or suppliers agreed upon restricting competition and controlling prices within a particular industry, often to maximize collective profits.