Scarcity is illustrated graphically by a production possibilities frontier.

In a Betrand price-setting duopoly model, the equilibrium output:

a. will be equal to the monopoly output. b. will be equal to the competitive market output. c. will lie between the monopoly and the competitive market output. d. will be higher than the monopoly output.

A typical economy produces thousands of different goods. Is it accurate to say that society faces a production possibilities frontier?

a. No, because two dimensions cannot capture the complexity of a full economy. b. No, although a graph with several thousand dimensions would be appropriate. c. Yes, although society does not face opportunity cost and the model does not apply. d. Yes, because scarcity always imposes opportunity costs. e. Uncertain-economic theory has no answer to this question.