Describe the concept of opportunity cost, Microeconomics

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Problem 1:

a. Describe the concept of opportunity cost, using the production possibility curve.

b. What are the fundamental problems of an economy? Describe how the command economy differs from the free market economy in dealing with resource allocation problems.

c. What are the strengths and weaknesses of a mixed economy?

Problem 2:

a. Distinguish between short-run and long-run costs.

b. Compare and contrast the short-run and long-run output decisions of the perfectly competitive firm and the monopoly.

c. Discuss long run efficiency under both kind of market structures?


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