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.
Ans: B) The straight-line boundary illustrates constant opportunity costs, whereas the concave boundary illustrates increasing opportunity costs.
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The above figure shows the domestic market for wheat. Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton
The quantity bought by domestic users once the price support is in place is A) 300 million tons. B) 400 million tons. C) 250 million tons. D) 200 million tons. E) 100 million tons.
How are most fundamental economic decisions now determined in China?
A) The government decides because China is a centrally planned economy. B) Individuals, firms, and the government interact in a market to make these economic decisions. C) The United Nations decides because China is a developing economy. D) These decisions are made by the country's elders who have had much experience in answering these questions.