Which of the following will shift the production possibilities curve outward?
a. a hurricane that destroys buildings throughout Florida
b. an increase in the capacity utilization of existing factories
c. an increase in the unemployment rate
d. a decrease in the market price of both goods
d
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Buyers receive a consumer surplus when the price exceeds the marginal benefit
Indicate whether the statement is true or false
Refer to Figure 3-1. If the product represented is a normal good, a decrease in income would be represented by a movement from
A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
With free entry:
A. there is a known and limited number of potential suppliers that can produce a good in the long run. B. there is an unlimited number of firms that can produce a good in the long run. C. the long run market supply curve is vertical at the market quantity. D. the long run market demand curve is horizontal at the market price.
In recent years, the number of farms has fallen while the average farm size has increased. What concept may explain this phenomenon?
a. diminishing marginal returns b. declining productivity c. diseconomies of scale d. economies of scale e. good weather in midwestern states