"If Mexico is currently operating at a point inside its production possibilities frontier, then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer
What will be an ideal response?
The statement is true. Points within the production possibilities frontier are attainable, so it is possible for Mexico to be producing at a point within its frontier. At points within the production possibilities frontier, there are unemployed or misallocated resources.
You might also like to view...
An upward-sloping supply curve suggests that producers
A) sell less at higher prices. B) sell more at lower prices. C) plan to sell more at a given, higher price. D) ignore marginal costs of production, and only focus on the demand for their product.
The centerpiece of classical economics is _____.
Fill in the blank(s) with the appropriate word(s).
Refer to the information provided in Figure 5.4 below to answer the question(s) that follow.
Figure 5.4Refer to Figure 5.4. The demand for milkshakes is unit elastic at Point C. If the milkshake price rises from P2 to P1, total revenue will
A. increase. B. decrease. C. either increase or decrease. D. remain constant.
A minimum wage is an example of a
A) price floor. B) price ceiling. C) quantity quota. D) free market equilibrium.