Choosing a Combination of Goods Represented by a Point Inside

question 57

Multiple Choice

Choosing a combination of goods represented by a point inside the production possibilities frontier indicates:

• A)that resources are not scarce.
• B)that resources are scarce.
• C)rational behavior.
• D)irrational behavior.

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Definitions:

One Buyer

A market condition known as a monopsony, where there is only one buyer for a particular product or service, giving that buyer significant control over prices.

Marginal Revenue

The extra revenue obtained from the sale of an additional unit of a product or service.

Substitutes

Goods or services that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.

Elastic

A characteristic of demand or supply where the quantity demanded or supplied responds significantly to price changes.