The production possibilities curve demonstrates the basic economic principle that:
a. market-based economies are more efficient.
b. supply will determine demand in the economy.
c. the production of more capital goods this year will cause the economy to produce less consumption goods next year.
d. to produce more of any one thing, assuming full employment, the economy must produce less of something else.
e. to produce more consumption goods this year requires the production of more capital goods this year.
d
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The ________ is the average hourly wage rate measured in current dollars, while the ________ is the average hourly rate measured in the dollars of a given reference base year
A) real interest rate; nominal interest rate B) nominal wage rate; real wage rate C) real wage rate; nominal wage rate D) nominal interest rate; real interest rate E) inflation rate; real wage rate
The above figure shows the apartment market in Big City. A rent ceiling of $1400 per month would
A) create a black market. B) increase search activity. C) not affect the market. D) create a surplus of apartments.
Given a consumption function of C = $25 + 0.75YD, the average propensity to consume equals 1 when disposable income equals
A. $75. B. $25. C. $100. D. -$300.
One of the reasons that Real Gross Domestic Product is not synonymous with social welfare is
A. people substitute between goods. B. quality has remained steady. C. the underground economy (unreported and illegal income and sales) is not counted. D. things produced by people under 18 are not counted.