Suppose a production possibilities frontier (PPF) has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point outside the PPF represents:
a. a smaller quantity of consumer goods than that represented by a point inside the PPF.
b. an inefficient output combination of the two goods
in the economy.
c. an unattainable output combination of the two goods in the economy.
d. an output combination of more consumer goods than capital goods.
e. a smaller quantity of capital goods than that represented by a point inside the PPF.
c
You might also like to view...
In the model of perfect competition, firms produce a
A) standardized product with considerable control over price. B) differentiated product with no control over price. C) differentiated product with considerable control over price. D). all of the above. E). none of the above.
Using the Keynesian aggregate expenditures model, which of the following is true?
a. Macro equilibrium may occur at levels of real GDP other than full-employment real GDP. b. At any macro equilibrium, the actual rate of unemployment must equal the natural rate of unemployment. c. If an economy is operating below full employment capacity, the Keynesian model indicates that lower wage rates will automatically adjust the economy back to full employment. d. All of these are correct.
The demand for health care in industrially advanced economies is:
A. highly elastic with respect to both price and income. B. highly inelastic with respect to both price and income. C. highly elastic with respect to income but highly inelastic with respect to price. D. about unit elasticity with respect to income and relatively inelastic with respect to price.
Suppose the best investment you could make with $100,000 in cash is to purchase a government bond that pays 5 percent interest per year. If you decide to invest the money in your own business instead of buying the government bond, the opportunity cost of this financial capital is
A. $50,000 per year. B. $500 per year. C. $5,000 per year. D. zero, because you already had the $100,000.