What does the term "increasing marginal opportunity cost" mean? How are increasing marginal opportunity costs represented on a bowed out production possibilities frontier?
What will be an ideal response?
Increasing marginal opportunity costs means that as more and more of a product is made, the opportunity cost of making each additional unit rises. They are represented by moving down a bowed out production possibilities frontier.
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Many social policies, such as progressive income tax systems, are based on the idea that
a. everyone values money the same b. politicians are more responsive to the interests of the rich c. interpersonal comparisons of utility, however difficult, can be made d. the poor have a lower consumer surplus than the rich e. everyone has the same utility function
For the purpose of calculating the consumer price index, the basket of goods
a. is kept the same from year to year so that the effects of price changes are isolated from the effect of any quantity changes that might be occurring at the same time. b. is kept the same from year to year; otherwise, the value of the index would remain constant from year to year. c. varies from year to year; otherwise, the value of the index would remain constant from year to year. d. varies from year to year so that consumers' buying patterns are updated in a timely fashion.