If economic resources are perfectly interchangeable between the two products shown on a production possibilities graph:
A. The economy will always be at full employment
B. More of one product can be produced without producing less of the other product
C. The production possibilities curve would be a straight line
D. The two products are of equal value to the economy
Answer: C
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A shortage will tend to occur at which price in Figure 4-21?
A. P1 B. P2 C. P3 D. There will be no shortage at the prices shown.
Regulatory policy used to affect credit markets is known as ________
A) fiscal restraint B) monetary policy C) Bierstadt relaxation D) macroprudential regulation
Entry of new firms will occur in a monopolistically competitive industry until
a. marginal cost equals zero b. marginal revenue equals zero c. marginal revenue equals marginal cost d. economic profit equals zero e. economic profit is negative
A key decision that all firms make is which technology to use in the production of their products.
Answer the following statement true (T) or false (F)