The law of increasing opportunity cost explains why
a. opportunity cost is constant along the production possibilities frontier
b. the production possibilities frontier is downward sloping
c. the production possibilities frontier is curved
d. efficient points lie along the production possibilities frontier
e. technology remains constant along a production possibilities frontier
C
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Money is still useful during times of inflation because
A) it still retains the characteristic of predictability of value. B) its opportunity cost falls as inflation rises. C) more money can be made so people can still purchase the goods and services they want. D) it is not a liquid asset.
Refer to Table 16-3. Suppose Julie's marginal cost of providing this service is constant at $7 and she charges each customer according to his or her willingness to pay instead of a uniform price of $7. Which of the following statements is true?
A) Julie has converted the consumer surplus (from a uniform price) into economic profit. B) Julie's has converted the producer surplus (from a uniform price) into consumer surplus. C) Julie is worse off because the demand for her services is reduced. D) Julie's customers are better off because their consumer surplus has increased.