The production possibilities curve illustrates which two of the following essential principles?
A. Economic growth and market failure.
B. Factors of production and price signals.
C. Scarce resources and opportunity cost.
D. Market mechanisms and laissez faire.
Answer: C
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To know whether a particular situation for a family, business, or government involves an equilibrium or not, one must
A) understand the circumstances fully. B) determine whether the accounts are in balance. C) determine whether the credits equal the debits. D) determine whether a particular portion of the accounts are in balance or not.
Which type of unemployment does not contribute to the natural rate of unemployment?
A. Frictional B. Structural C. Real-wage D. Cyclical
Which of the following statements is correct? I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases total planned real spending on domestic goods shifts the AD curve to the right.
A. I only B. II only C. Both I and II D. Neither I or II
A straight line production possibilities curve takes this shape because A) the opportunity cost of producing a good is constant. B) the opportunity cost of producing more of a good is decreasing. C) resources are better suit D) resources are fixed.