Why is a point below the production possibilities curve less efficient than a point on that curve?
What will be an ideal response?
A point on the production possibilities curve is efficient because it means the economy is producing the maximum outputs of goods and services with given resources and technology. By contrast, a point below the production possibility curve means that the use of the given resources is not generating the maximum possible outputs of goods and services. Thus, this point represents an inefficient combination of outputs produced with available resources and technology.
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Assume that the initial demand and supply curves in the above figure are DA and SA, respectively. The initial equilibrium price and quantity are
A) P1 and E. B) P3 and F. C) P1 and G. D) P2 and F.
The supply curve in the market for land that has limited availability is:
a. perfectly elastic. b. relatively inelastic. c. unit elastic. d. perfectly inelastic. e. relatively elastic.
Refer to the graph shown. Within which part of the production function is the firm most likely to operate?
A. A B. B C. C D. B and C
The deposit-creation formula can be defined as
A. one minus the required reserve ratio. B. the same as the GDP income multiplier. C. the reciprocal of the required reserve ratio. D. one plus the required reserve ratio.