The production possibilities frontier can be used to show all of the following except one. Which is the exception?
a. scarcity
b. opportunity cost
c. the law of increasing opportunity cost
d. efficiency
e. the best combination of goods and services for an economy
E
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If the Fed's policy reaction function equals r = .02 + p, where r is the real interest rate, p is the inflation rate. When the inflation rate is zero, then the real interest rate will:
A. set to equal 2%. B. set equal zero too. C. set to equal 4% D. be below the target value for the real interest rate.
If the price of a product increases
A) there is an increase in quantity supplied and a decrease in demand. B) there is an increase in supply and a decrease in quantity demanded. C) there is an increase in supply and a decrease in demand. D) there is an increase in quantity supplied and a decrease in quantity demanded.
If the earnings report of a firm indicates higher earnings than was expected by the investors:
a. the stock prices of the firm will decline. b. the price of the product produced by this firm will decline. c. the price of the product produced by this firm will rise. d. the firm will spend more on advertising. e. the stock prices of this firm will increase.
Given the economy's existing resources and technology, the only way to enjoy more consumer goods today is to
a. devote more resources to investment goods today. b. accumulate more capital today. c. have a slower economic growth rate in the future. d. devote more resources to consumer goods in the future.