Relative prices are different for each nation because their production frontiers and indifference curves differ in _______________.
A)shape and location
B)shape,but not location
C)location,but not shape
D)neither shape nor location

Question

Quizplus · Accepted Answer

Relative prices are determined by the intersection of production possibilities frontier and indifference curves. The shape and location of the production frontier and indifference curves determine the relative prices of goods and services. Therefore, choice A is the correct answer as it suggests that both the shape and location differ for each nation.

Relative Prices Are Different for Each Nation Because Their Production