An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X. Furthermore, the opportunity cost between the two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's production possibilities frontier?
What will be an ideal response?
700 units of X and 280 units of Y
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As depicted in the circular flow diagram, firms
A) supply the resources that households demand in factor markets. B) demand the goods and services that households supply in product markets. C) demand the resources that households supply in product markets. D) supply the goods and services that households demand in product markets.
In order for the classical model to explain expansions and recessions, which of the following would have to be true?
a. Labor supply could not change. b. The labor market equilibrium would have to change suddenly and significantly. c. Labor demand could not change. d. The labor market equilibrium would have to change slowly. e. The labor market equilibrium could not move.
In order to maintain an effective fixed exchange rate that differs from the market rate, the government must have
a. arbitrage capability b. a surplus of merchandise exports c. the ability to persuade other governments to control their exports d. sufficient foreign exchange reserves e. the ability to float high interest rates
Empowerment may be a problem because
A. managers are usually ambiguous when it comes to empowerment. B. managers are usually very eager to empower those who are least qualified. C. managers are never eager to empower anyone else except themselves. D. workers are always eager to empower themselves even if they are unqualified.