Any point on the production possibility frontier is
A) attainable and might be allocatively inefficient.
B) attainable and must be allocatively efficient.
C) less production efficient than a point in the interior of the PPF.
D) always allocatively efficient but might or might not be production efficient.
E) always production efficient and always allocatively efficient.
A
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Prices of California Merlot wine (assume that this is a normal good) have risen steadily in recent years. Over this same period, prices for French oak barrels used for wine storage have dropped and consumer incomes have risen
Which of the following best explains the rising prices of California Merlots? A) The supply curve for Merlot has shifted to the right while the demand curve for Merlot has shifted to the left. B) The demand curve and the supply curve for Merlot have both shifted to the left. C) The demand curve for Merlot has shifted to the right more than the supply curve has shifted to the right. D) The supply curve for Merlot has shifted to the right more than the demand curve has shifted to the right.
An increase in the nominal interest rate increases the quantity of credit card services because
A) bank profits go up. B) of intertemporal substitution. C) the opportunity cost of making transactions with money has risen. D) the substitution effect is greater than the income effect.
The response in quantity demanded to a price increase in subway rides:
A. will be more elastic in six weeks than in six months. B. will be less elastic in six weeks than in six months. C. will be the same over that time period. D. is unpredictable without more information.
Which of the following is true about long-run profits for monopolistically competitive firms?
a. Monopolistically competitive firms always experience positive economic profits in the long run. b. Monopolistically competitive firms always experience zero economic profits in the long run. c. Monopolistically competitive firms always experience negative accounting profits in the long run. d. Monopolistically competitive firms always experience positive accounting profits in the long run.