Using Figure 1.5, if an economy has the capacity to produce represented by PP2, then point E represents
A. An efficient use of resources.
B. A constant trade-off between potato chips and doughnuts.
C. A combination of potato chips and doughnuts that is not attainable.
D. None of the choices are correct.
Answer: A
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The market for wheat is an example of
A) a monopoly market. B) an oligopolistic market. C) a perfectly competitive market. D) a monopolistically competitive market.
Behavioral economics under uncertainty documents that
A) people's behavior often differs from what standard expected utility theory predicts. B) people's behavior can change with their circumstances. C) people might put considerable weight on certain outcomes. D) All of the above.
If a firm offers a senior citizen discount
A) the firm expects the average senior citizen to have a lower price elasticity of demand. B) the firm expects the average senior citizen to have a higher price elasticity of demand. C) senior citizens may be offended. D) it may be prosecuted for discrimination.
In long-run equilibrium, the typical perfectly competitive firm will:
a. earn zero economic profit. b. change plant size in the long run. c. change output in the short run. d. do any of these.