Figure 11-13 -Refer to Figure 11-13.The Lines Shown in the Diagram Are

question 14

Multiple Choice

Figure 11-13

-Refer to Figure 11-13.The lines shown in the diagram are isocost lines.Which of the following shows a decrease in the price of capital while the price of labor remains unchanged?

• A)the movement from AF to BF
• B)the movement from BF to AF
• C)the movement from BF to BD
• D)the movement from BF to CE

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Definitions:

Purely Competitive Economy

An idealized market structure where many firms sell identical products, entry and exit are easy, and no single buyer or seller can influence the market price.

Economic Profit

Sales minus explicit costs and implicit costs.

Competition

The rivalry among businesses to sell their goods and services to consumers, typically considered healthy for stimulating innovation and keeping prices competitive.

Natural Scarcity

Refers to the finite availability of resources that are limited by nature and cannot be replaced or regenerated quickly enough to meet the increasing demand.