A production possibilities frontier can shift outward for all of the following reasons except one. Which is the exception?
a. a decrease in the unemployment rate
b. an improvement in labor skills
c. an improvement in technology
d. a larger work force
e. a larger capital stock
A
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A (very, very small) country produces milk and shirts and its production possibilities frontier is in the table above
a. The nation is currently producing at point B. What is the opportunity cost of two additional gallons of milk? At point C? At point D? What do your results show? b. Suppose the nation is initially producing 4 gallons of milk and 40 shirts. What is the opportunity cost of 2 additional gallons of milk? Explain your answer.
If the university administration plans to hike tuition charges in the hope of increasing tuition revenues, we know
A) they are assuming an elastic demand. B) they are assuming an inelastic demand. C) they cannot succeed because of the law of demand. D) they must be running in the red. E) they will only succeed if more students can be enrolled at no cost.