Refer to Scenario 1 . Assume this economy could either be at Point B or Point C. From which of these points is it more costly to produce more crabs? Explain your answer
What will be an ideal response?
It's more costly to produce more crabs from Point C than it is to produce more crabs from Point B. The reason is that as you move up the production possibilities frontier the more crabs you produce the greater the amount of fish the economy will have to give up to produce them. For example from Point B the opportunity cost of producing 15 more crabs is twenty fish. However, if we start from Point C and wish to produce 15 more crabs we have to give up 30 fish.
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Any attempt to capture a consumer surplus, a producer surplus, or an economic profit is called
A) profit-maximizing. B) rent-seeking. C) price discriminating. D) efficiency gain.
The assumed goal of the firms that operate in each of the four market structures discussed in the text is to maximize:
A) sales. B) revenue. C) profits. D) price.