: 8. if a production possibilities frontier (PPF) is concave downward, it follow

Question

: 8.
if a production possibilities frontier (PPF) is concave downward, it follows that
a. none of the above
b. the opportunity costs (of producing the good on the horizontal axis) fall as more of the good is produced.
c. the opportunity costs (of producing the good on the horizontal axis) first rise and then fall as more of the good is produced.
d. opportunity costs are constant between two goods.
e. the opportunity costs (of producing the good on the horizontal axis) rise as more of the good is produced.

11.
Suppose people are in consumer equilibrium buying 10,000 units of good X at a given price. Then the price of good X falls to $0. It follows that people will buy more of good X and that the marginal utility of the last additional unit they buy will be __________ the __________ of the 10,000th unit.
a. the same as; marginal utility
b. lower than; marginal utility
c. greater than; marginal utility
d. greater than; average utility
e. none of the above

12.Which of the following is false?
a. Graph (2): As supply increases, equilibrium quantity remains constant.
b. Graph (1): There is a shortage when price is P3.
c. Graph (3): As demand increases, equilibrium price remains constant.
d. Graph (4): As supply changes, equilibrium price stays the same.

Explanation / Answer

8) b. the opportunity costs (of producing the good on the horizontal axis) fall as more of the good is produced. 11) b. lower than; marginal utility 12) c. Graph (3): As demand increases, equilibrium price remains constant.

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