The production possibilities frontier cannot be used to show
A. scarcity in a society.
B. the trade-offs involved in production decisions.
C. the unequal distribution of resources among the members of society.
D. All of the responses are correct.
Answer: C
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When two companies that produce the same product merge, it is called a
A) conglomerate merger. B) diagonal merger. C) horizontal merger. D) vertical merger.
In the figure above, the second poorest 20 percent of households receive ________ of total income
A) 5 percent B) 10 percent C) 15 percent D) 20 percent
The Chinese economic reforms of 1978 opened China to international trade and investment. These reforms gave China access to new capital and technology, which
A) allowed China to decrease its capital-labor ratio and increase labor productivity. B) increased China's total factor productivity and standard of living. C) accelerated Chinese productivity to a level where Chinese real GDP per capita is now on par with that in the United States. D) rapidly increased productivity in China and convinced Chinese officials to expand the reforms to include complete privatization of its financial system.
Shifting resources from other goods to security goods may not increase a nation's national security if
a. the law of increasing opportunity cost is not applicable b. the economy is already at full employment c. the economy is not at full employment d. national security is already at its maximum e. other nations react to the shift by increasing their own spending on national security