The production possibilities curve illustrates the basic principle that
a. an economy's capacity to produce increases in proportion to its population.
b. if all resources of an economy are in use, more of one good can be produced only if less of another is produced.
c. an economy will automatically seek that output at which all of its resources are employed.
d. no opportunity cost exists in production.
b
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The division of the burden of a sales or excise tax on demanders and suppliers:
a. Is always equal. b. Is always higher for demanders. c. Is always higher for suppliers. d. Depends on the shapes of the demand and supply curves.
Elasticity computations related to demand carry a minus sign to show that the demand curve is negatively sloped
a. True b. False Indicate whether the statement is true or false
Which of the following statements about a production function is correct for a firm that uses labor to produce output?
a. The production function depicts the relationship between the quantity of labor and the quantity of output. b. The slope of the production function measures marginal product. c. The slopes of the production function and the total cost curve are inversely related; if one is increasing, the other is decreasing. d. All of the above are correct.
The cross price elasticity of demand is (mathematically) the
A. percentage change in the quantity demanded of one good divided by the price of another good. B. percentage change in the quantity supplied of one good divided by the price of another good. C. percentage change in the quantity supplied of a good divided by the price of that good. D. percentage change in the quantity demanded of a good divided by the price of that good.