Which of the following statements about a movement along the production possibilities curve in the above figure is FALSE?
A. There are no opportunity costs involved in choosing one point on the curve over all other points.
B. Society cannot have more of both goods at the same time.
C. An additional computer can be produced only if fewer televisions are produced.
D. The trade-off between computers and televisions is not constant.
Answer: A
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If a competitive firm is in short-run equilibrium, then
A) profits equal zero. B) economic profits will be positive. C) economic profits will be negative. D) All of the above are possible in the short run.
Lauren makes $150 a day as a bank clerk. She takes two days off work without pay, to fly to another city to attend the concert of her favorite band. The cost of transportation and lodging for the trip is $250. The cost of the concert ticket is $50. The
opportunity cost of Lauren's decision to attend the concert is: A. $600 B. $450 C. $300 D. $250
The idea that some people engage in risky behavior due to the fact that they have good health care is known as
A. risk aversion. B. risk-taking behavior. C. moral hazard. D. zero-sum game.
Refer to the graph below. Economic growth driven by productivity and technology would be illustrated as a shift of:
A. AD1 to AD2
B. P1 to P2
C. AS2 to AS1
D. ASLR1 to ASLR2