The production possibilities curve:
A. shows all of those levels of production that are consistent with a stable price level.
B. indicates that any combination of goods lying outside the curve is economically inefficient.
C. is a frontier between all combinations of two goods that can be produced and those
combinations that cannot be produced.
D. shows all of those combinations of two goods that are most preferred by society.
Answer: C
You might also like to view...
Suppose the consumer's indifference curves are concave (i.e., bowed away from the origin) instead of convex. In this situation,
a. along an indifference curve, the marginal value of X is falling as more X and less Y is consumed. b. all baskets on the budget line give the consumer the same level of satisfaction. c. the marginal value of X must equal PX/PY at the consumer's optimum. d. the consumer's optimum is always a corner solution.
Suppose aggregate demand is increasing over time. Would the modern Keynesian model assume that the price level would always be constant? Explain
What will be an ideal response?
In the figure above, if a tax of $2 per widget is imposed on sellers, then the after-tax amount per widget received by the seller will be
A) more than or equal to $8. B) between $8 and $6. C) $6. D) less than $6.
What role should the government play with respect to the agricultural sector in developing countries in their attempt to alleviate poverty?
What will be an ideal response?