Absolute advantage is based on opportunity cost

In the market for bananas, the price is $2.00 a bunch. An increase in the supply of bananas decreases the price of bananas and ________

A) the quantity supplied increases because the price falls B) increases the demand for bananas C) increases the quantity of bananas demanded D) creates a shortage of bananas

A straight-line production possibilities boundary differs from a concave boundary in which of the following ways?

A) The straight-line boundary shows opportunity cost, whereas the concave boundary does not. B) The straight-line boundary illustrates constant opportunity costs, whereas the concave boundary illustrates increasing opportunity costs. C) A straight-line boundary is associated with a command economy, whereas a concave boundary is associated with a free-market economy. D) The concave boundary illustrates constant opportunity costs, whereas the straight-line boundary illustrates decreasing opportunity costs. E) The straight-line boundary does not show scarcity, whereas the concave boundary does.