If the economy produces 27 consumer goods and 12 capital goods, the economy would be producing __________________ (outside/on/inside) the production possibilities curve.
Hypothetical Production Schedule for a Two-Product Economy
inside
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For which of the following goods is the income elasticity of demand likely lowest?
a. subscriptions to premium movie channels through the local cable television provider b. hi-definition DVD players c. champagne d. housing
Show graphically and explain the effects of imposition of a quota by a small country under competitive conditions. The quota rights are given away for free to a fixed set of import distributor firms in the country.
What will be an ideal response?
If firms in a monopolistically competitive market are earning economic profits greater than zero in the short run, then in the long run:
A. firms will exit this market. B. profits will increase. C. profits will decrease. D. demand will not change.
If a country has a lower opportunity cost than its potential trading partner, the country should decide to be self-sufficient
a. True b. False Indicate whether the statement is true or false