Which of the following distinguishes a "straight-line" production possibilities curve from one that is "bowed out"?
a. A straight-line production possibilities curve exhibits increasing opportunity costs, whereas a bowed production possibilities curve does not.
b. A straight-line production possibilities curve exhibits decreasing opportunity costs, whereas a bowed production possibilities curve does not.
c. A straight-line production possibilities curve exhibits constant opportunity costs, whereas a bowed production possibilities curve does not.
d. A straight-line production possibilities curve is upward sloping, whereas a bowed production possibilities curve is not.
c
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How are tradable pollution permits used?
a) They are permits bought by firms where prices are set by governments. b) They will be bought by firms that can reduce pollution only at high costs. c) They will be bought by firms that can reduce pollution at low costs. d) They will be used in reducing pollution when corrective taxes cannot be used.
What is meant by producer surplus? How is producer surplus in a competitive market calculated?
What will be an ideal response?