In a production possibilities frontier graph, the cost of producing more units of a good is measured by the
A) dollar value of the additional output.
B) area in the arc between the PPF and a straight line drawn between the starting point and the ending point.
C) dollar value of the resources used to produce the good.
D) amount of the other good or service that must be forgone.
E) None of the above answers is correct.
D
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A hot dog vendor on a street corner could increase the quantity of hot dogs her customers demand by 12 percent if she lowers the price of a hot dog 10 percent. The demand for the hot dogs is
A) cross elastic. B) arc elastic. C) unit elastic. D) elastic.
A person will choose to buy a good as long as
A) marginal benefit is at least as great as price. B) consumer surplus is positive. C) marginal benefit is positive. D) consumer surplus is at least as great as price.