The production possibilities curve bows outward because
A) opportunity costs are decreasing as the production of a good increases.
B) opportunity costs are increasing as the production of a good increases.
C) opportunity costs are fixed as the production of a good increases.
D) resources are of uniform quality.
Answer: B
You might also like to view...
Some individuals seek to use government action to make themselves better off at the expense of others. The actions of these individuals
A) are evidence of the voting paradox. B) are examples of fraud; but these individuals usually avoid prosecution because of logrolling and rational ignorance. C) offer proof that Adam Smith's "invisible hand" is not valid. D) are examples of rent seeking.
When actual GDP does not rise as fast as potential GDP, the economy most likely will experience
A. inflation. B. recession. C. economic growth. D. falling unemployment.
Suppose the inverse market demand is given by P = 75 ? 0.5Q. If the incumbent continues to produce 20 units of output, which of the following equations best summarizes the potential entrant's residual demand curve?
A. P = 65 ? 0.5Q B. P = 20 ? 0.5Q C. P = 65 ? 2Q D. P = 150 ? 2Q
A rational-expectations theorist argues for increased government involvement in the economy to ensure stable price and employment growth.
Answer the following statement true (T) or false (F)