An outward bowed production possibilities curve illustrates
A. inefficient production.
B. a lack of scarcity.
C. the law of increasing additional cost.
D. zero opportunity cost of moving from inefficient production to currently unobtainable production.
Answer: C
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If the accounting profit equals $200,000 and implicit costs equal $40,000, the economic profit equals
a. $240,000. b. $200,000. c. $160,000. d. $40,000.
Cyclical unemployment arises when
A) unskilled or low-skilled workers find it difficult to obtain desirable, long-term jobs. B) labor must be reallocated from industries that are shrinking to areas that are growing. C) workers must search for suitable jobs and firms must search for suitable workers. D) output and employment are below full-employment levels.
An example of a public good is: a. a pizza
b. milk. c. a delivery truck. d. national defense.
The public debt neither adds to nor subtracts from national production or consumption, but
a. if the bondholders are only the rich, the rich lose in the long run b. poorer people, because they hold fewer bonds, end up paying less taxes c. no individuals lose because everyone holds debt d. individuals may gain or lose depending on whether they hold debt e. neutrality of the debt means it is a win/win situation for everyone