Which of the following is an assumption used when drawing a production possibilities frontier?
i. Human wants and desires are limited to what is available.
ii. Only two goods are considered.
iii. The level of technology is fixed and unchanging.
A) i only
B) ii only
C) i and iii
D) ii and iii
E) i, ii, and iii
D
You might also like to view...
The bias in the CPI typically
A) overstates inflation. B) understates inflation. C) about half the time overstates and about half the time understates the inflation rate. D) cannot be measured or estimated.
Tobacco prices fell dramatically in the early 1600s in spite of demand increases because:
a. supply was also increasing. b. supply was decreasing. c. new farming machinery was introduced. d. the colonial government provided agriculture subsidies for tobacco farmers.
A supply curve can be thought of as
a. a graphical display of "market potential." b. a graphical representation of the information in a supply schedule. c. showing the maximum quantities that firms are able to produce. d. a forecasting tool. e. All of the above are correct.
Suppose that a worker in Boatland can produce either 5 units of wheat or 25 units of fish per year, and a worker in Farmland can produce either 25 units of wheat or 5 units of fish per year. There are 30 workers in each country. No trade occurs between the two countries. Boatland produces and consumes 75 units of wheat and 375 units of fish per year while Farmland produces and consumes 375 units
of wheat and 75 units of fish per year. If trade were to occur, Boatland would trade 90 units of fish to Farmland in exchange for 80 units of wheat. If Boatland now completely specializes in fish production, how many units of fish could it now consume along with the 80 units of imported wheat? a. 490 units b. 500 units c. 610 units d. 660 units