Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables. The combination of ________ reflects ________
A) 500 books and 1000 tables; an inefficient but attainable point.
B) 500 books and 500 tables; an attainable and efficient point.
C) 1000 books and 1500 tables; a free lunch.
D) 1000 books and 1000 tables; a free lunch.
E) 1000 books and 500 tables; an efficient point.
A
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Suppose that a local government decides to provide more funds to the local police department in order for the department to hire additional police officers. Is there an opportunity cost of this action? If so, how would you measure it?
What will be an ideal response?
A bond that pays a high interest rate
A. is more secure than one that pays a low interest rate. B. is guaranteed by the U.S. government. C. reflects the higher risk that the issuer will default. D. will sell for a high price.
The production possibilities frontier illustrates
a. the constant rate of technological progress. b. the fundamental concept of scarcity. c. the rapid growth of the U.S. economy. d. that guns always trade for butter.
Which of the following is FALSE regarding the long run for a firm in monopolistic competition?
A) The firm makes zero economic profit. B) Price equals average total cost. C) Output is not produced at minimum average total cost. D) None of the above is a false statement.