If a Country Has a Bowed Out (Concave to the Origin)production

question 28

Multiple Choice

If a country has a bowed out (concave to the origin) production possibility frontier,then production is said to be subject to

• A)constant opportunity costs.
• B)decreasing opportunity costs.
• C)first increasing and then decreasing opportunity costs.
• D)increasing opportunity costs.

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Definitions:

Contestable Markets

Markets where the threat of potential entry by competitors influences the behavior and pricing of existing firms.

Perfectly Competitive

A market structure characterized by a large number of small firms, homogenous products, perfect information, and free entry and exit, leading to price taking behavior.

Five Forces Model

A framework developed by Michael Porter to analyze the level of competition within an industry and business strategy development, which includes the threat of new entrants, the threat of substitutes, the bargaining power of buyers, the bargaining power of suppliers, and competitive rivalry.

Product Differentiation

The process of distinguishing a product or service from others to make it more attractive to a particular target market.