An economy that operates inside its production possibility curve is less efficient than it would be if it were operating on its production possibility curve.
Answer the following statement true (T) or false (F)
True
The production possibility curve represents the most output we can get with a given level of inputs. Operating inside that curve would mean that we can produce more with the given inputs and, as long as we prefer more to less, represents a less efficient point than a point on the production possibility curve.
You might also like to view...
Financial deregulation and innovation since the late 1970s has made spending, especially new housing, ________ sensitive to changes in the market interest rate, leading to a ________ IS curve
A) more, steeper B) more, flatter C) less, steeper D) less, flatter
In consumer equilibrium, the marginal utility of good A, B and C are 100, 300, and 400 respectively. If the price of good A was $35, then the prices of goods B and C, respectively, are:
a. $105 and $140. b. $140 and $105. c. $105 and $175. d. $140 and $175.
In perfect competition, an economic profit can be earned
a. only in the long run b. only if the firm is efficient c. only in the short run d. never e. always
Suppose you own a plum (high-quality) used car that you are thinking about selling. Further, suppose you know that buyers assume that there is a 30% chance of getting a plum, and that 8 of 10 cars currently in the used car market are lemons (low-quality). Would you likely sell your car?
What will be an ideal response?