The production possibilities frontier:
A. can show us which possible combinations of goods society should choose, but cannot tell us which points will be inefficient.
B. can show all possible combinations of goods but not tell us which combination society should choose.
C. cannot show all possible combinations of goods because society is typically inefficient.
D. can show the best combination of goods which society should choose.
Answer: B
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Which of the following is the worst-case scenario for a consumer?
a. Perfect competition b. Perfect price discrimination c. Single-price monopoly d. Peak load pricing
The simplified spending multiplier is calculated as:
A. 1/(1 ? MPC). B. ?1/(1 ? MPC). C. ?MPC/(1 ? MPC). D. (1 ? MPC) × ?MPC.
If output rises, then income
a. drops by an equal amount b. remains stable c. rises twice as fast as output d. rises slowly e. rises by an equal amount
Which of the following would a Keynesian economist be most likely to stress?
a. Supply creates its own demand. b. Businesses will not produce goods and services if they do not think people will buy them. c. You cannot spend your way out of a recession. d. When the unemployment rate is high, wage rates will fall. e. A dollar saved is a dollar earned; a high rate of saving is the key to prosperity.