Consider the Production Possibilities Frontier in the Figure Shown

question 93

Multiple Choice

Consider the production possibilities frontier in the figure shown.The opportunity cost of cars when moving from point B to point C:

• A)is greater than the opportunity cost of cars when moving from point A to point B.
• B)is less than the opportunity cost of cars when moving from point A to point B.
• C)is greater than the opportunity cost of cars when moving between any other two points.
• D)there is no opportunity cost when we move from B to C.

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Definitions:

Price-Elastic

A characteristic of goods or services for which demand significantly changes with small changes in price.

Marginal Revenue

The revenue increase from the sale of an additional unit of a good or service.

Marginal Cost

The additional cost incurred by producing one more unit of a product.

Raise Price

An action taken by a seller to increase the selling price of a product or service, often in response to higher costs or in an attempt to increase profits.