Which of the following does the production possibilities curve illustrate?
a. The tradeoffs facing a society
b. The fact that more of one product can be produced only by reducing the quantity of other products that are being produced, assuming that resources are being used efficiently
c. The maximum output that can be produced with a limited amount of resources
d. The opportunity cost of alternative choices
e. All of these
e
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The elements of investment spending are ________
A) calculated only in real terms B) equivalent to their corresponding international transactions C) consumption, government, exports and imports D) highly procyclical
Suppose an American worker can make 100 chairs or catch 900 fish per day. On the other hand, a Chilean worker, can make 40 chairs or catch 400 fish per day. The United States has an absolute advantage in the production of both fish and chairs. This means that the United States:
A. should produce only chairs and trade with Chile to get fish. B. should produce only fish and trade with Chile to get chairs. C. should take advantage of Chile by trading with them. D. can produce more fish and chairs than Chile given the same amount of workers.
An increase in interest rates:
A. decreases aggregate demand, slowing economic activity. B. decreases aggregate demand, increasing economic activity. C. increases aggregate demand, slowing economic activity. D. increases aggregate demand, increasing economic activity
In a market economy, most of what we consume is obtained by
a. a command system b. greed c. altruism d. exchange e. central planning