Using your own words, describe the law of increasing opportunity costs. Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier
People (and other resources) have varying abilities when it comes to producing a given product which results in a non-constant opportunity cost. Those resources that are better suited at making the product will have a lower opportunity cost than those who are less-suited. As more of a product is produced, it becomes increasingly more difficult to find resources that are well-suited to producing that product. Therefore, the opportunity cost of producing more units grows as additional units are produced. and the PPF becomes steeper and steeper. The result is that the PPF is typically bowed-outward due to the law of increasing opportunity costs.
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In the consumer's NPV decision, the correct value for the interest rate R is
A) the interest rate that could be earned in a savings account when the consumer must borrow to finance the purchase. B) the interest rate that would have to be paid on a loan when the consumer could pay for the purchase with funds in a savings account. C) the interest rate charged for the loan when the consumer must borrow to finance the purchase. D) the prime rate, irrespective of whether when the consumer must borrow to finance the purchase. E) the prime rate plus the rate of inflation as measured by the CPI, irrespective of whether when the consumer must borrow to finance the purchase.
Which of the following determines the quantity demanded of a commodity?
a. The income levels of consumers b. The price of the commodity c. The prices of related commodities d. The number of buyers e. Consumers' expectations