What does a production possibilities frontier show?
a) scarce and less scarce resources
b) global trade-offs and costs of doing business
c) an economy that is producing but not at the maximum
d) the maximum amount that an economy can produce
Ans: d) the maximum amount that an economy can produce
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Consider an outcome in which it is impossible to make one player better off without simultaneously making the other player worse off. We can conclude that this outcome
a. cannot be a Nash equilibrium. b. must be Pareto optimal. c. will not occur when the players use mixed strategies. d. is a Stackelberg equilibrium.
In the past the federal government often employed what is called a "command-and-control" approach to the reduction of pollution emissions. Many economists are critical of this approach because
A) they believe a market-based approach will reduce pollution more efficiently. B) it does not lead to significant reductions in pollution. C) the "command-and-control" approach leads to negative externalities. D) the "command-and-control" approach is designed to help firms at the expense of consumers.
An economy that is operating below its full-employment capacity is experiencing a(n):
a. tax-induced recession. b. recessionary gap. c. fiscal drag. d. market correction. e. inflationary gap.
Some economists believe that high concentration within industries is _________, and we should __________
a. c, d, and e b. terrible; deregulate the industries c. beneficial; encourage it d. inevitable; learn to live with it e. not inevitable; break up monopolies