The production possibilities curve illustrates the basic principle that
a. an economy's capacity to produce is unrelated to its population.
b. if all the resources of an economy are being used efficiently, more of one good can be produced only if more of another good is produced.
c. an economy will automatically move toward a point at which all of its resources are being used inefficiently.
d. if all the resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.
D
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The poverty rate in 2008 was _________ the poverty rate in 1960.
A. much lower than B. a little lower than C. about the same as D. a little higher than
By failing to expand output to the point where marginal benefit equals market price, firms with market power produce less of the good and charge a higher price than would be socially optimal
Indicate whether the statement is true or false
In the long run
A. all costs are variable. B. total variable cost equals total fixed cost. C. total fixed cost is greater than total variable cost. D. all costs are fixed.
Suppose that the price of doughnuts decreases. Given that doughnut-holes are a by-product of producing doughnuts, one would expect:
A. the supply of doughnuts to increase. B. the supply of doughnut holes to increase. C. the supply of doughnuts to decrease. D. the supply of doughnut holes to decrease.