Isoquants reflect the fact that in the long run:
a. inputs can be substituted for each other.
b. a fixed set of inputs can produce different levels of output.
c. inputs used in production are complementary in nature.
d. different levels of input can be used to satisfy a budget constraint.
A
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An assumption behind the infant industry argument for tariff protection is that
A) foreign competitors are selling output below average cost. B) the domestic industry will be facing an upward adjustment in its average cost. C) the domestic industry will eventually gain comparative advantage in producing the good. D) the market needs additional competition to satisfy consumer demand.
On a straight-line production possibilities frontier, which of the following is true?
a. The problem of scarcity does not exist. b. Resources are imperfect substitutes. c. Opportunity costs are constant. d. Technology is rapidly expanding. e. Some resources are not being used efficiently.