Suppose that an economy is producing on its production possibilities curve but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good. This economy:
A. should not change its production because it cannot improve its allocation by shifting
resources.
B. can improve its allocation by lowering the unemployment rate.
C. can improve its allocation by producing more of one good and less of the other.
D. can improve its allocation by producing more of both goods.
Answer: C
You might also like to view...
Opportunity costs are
A) always marginal costs. B) never marginal costs. C) not related to marginal costs. D) sometimes marginal costs. E) sunk costs.
The slope of the consumption function equals the
a. price elasticity of demand. b. marginal propensity to consume. c. marginal rate of investment. d. marginal propensity to save.
Expansionary fiscal policy consists of:
a. increased government purchases and increased taxes. b. decreased government purchases and decreased taxes. c. decreased government purchases and increased taxes. d. increased government purchases and decreased taxes.
Which of the following can be used to help explain wage differences among different groups of workers?
a. human capital b. discrimination c. unions d. All of the above could explain wage differences among groups.