For an economy to produce at a point beyond its production possibilities curve, the economy can:...
Question:
For an economy to produce at a point beyond its production possibilities curve, the economy can:
A. use its current set of resources more efficiently
B. charge lower prices
C. charge higher prices
D. increase its economic resources (over time)
Production Possibility Curve:
A production possibility curve shows the maximum possible output combinations of two goods or services an economy can produce when all resources are employed fully and efficiently.
Answer and Explanation: 1
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View this answerThe answer is d. increase its economic resources because the production possibility curve shows the combination of two goods produced when resources...
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Production Possibilities Curve: Definition & Examples
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Chapter 11 / Lesson 28
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Understand what the production possibilities curve is, and learn how to construct and interpret a production possibilities curve along with the example.
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- Costs of production that do not change with the rate of production are: a. Variable costs. b. Marginal costs. c. Fixed costs. d. Nonexistent.
- How is the production possibilities frontier related to the production contract curve? The production possibilities frontier shows A. the total cost of producing combinations of two goods along the production contract curve. B. which points on the product
- Scarcity, choice, and opportunity cost can be illustrated with the aid of a production possibilities curve (PPC), also called a Production Possibilities Frontier (PPF). In terms of the above statement, discuss the importance of the production possibility
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- The competitive firm maximizes profits by ____. a. producing all they possibly can and selling at the market price b. charging prices well above their marginal costs of production c. producing up to the point where marginal revenue and marginal costs a
- Using a Production Possibilities Frontier diagram for two-good two-factor economy, illustrate and explain the relationship between opportunity costs and the relative prices (P_A/P_B) in a competitive equilibrium. Demonstrate how a relative decrease in the
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- On the production possibilities curve (PPC), there are points that are not attainable (N), efficient, and inefficient (I). Briefly explain where an economy would prefer to be on the PPC. Can the economy operate at point N? Explain why or why not. Can the
- The principle of opportunity cost is that: (a) in a market economy, taking advantage of profitable opportunities involves some money cost (b) the economic cost of using a factor of production is the alternative use of that factor that is given up (c) taki
- Land, labor, capital and entrepreneurial talent are often referred to as: A. production possibilities. B. goods and services. C. unlimited human wants. D. opportunity costs. E. scarce economic resources.
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- At the market equilibrium, resources are allocated efficiently because: a. the marginal cost of producing another unit is equal to zero. b. the price buyers pay accurately reflects the marginal cost of the resources used to produce the good. c. the price
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- For pricing purposes, fixed costs incurred by a firm with market power are a. the same as marginal costs. b. the same as opportunity costs of production. c. not taken into consideration. d. the same as variable costs.
- The amount of output that would be produced by an economy if resources were being utilized at a high rate that is sustainable in the long run is referred to as the: a. potential output b. Walrasian output c. partial-equilibrium output d. natural output
- Opportunity cost is evident in the production possibilities frontier (PPF) graph a. as you move from one point on the frontier to another point on the frontier. b. as you move from the origin to any inefficient point. c. as you move from one unattainable
- Under what condition is the production possibilities frontier linear rather than bowed out? a. when production costs are increasing b. when production costs are decreasing c. when production costs are constant d. when production costs increasing exponenti
- A competitive firm's supply curve is determined by: a. its marginal costs. b. the market price. c. the zero (economic) profit condition. d. its fixed inputs.
- If an economy is operating at a point that is outside of its production possibilities Frontier then it can be assumed that it is: a. unsustainable b. misallocated c. full utilized d. underemployed
- If marginal cost is less than average cost, at current levels of production, a. average cost is increasing with output. b. average cost is decreasing with output. c. total cost is decreasing. d. average cost is at a minimum.
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- At the current level of output, the following data exists: Price =$20, Marginal cost =$6, Average variable cost =$10, Average total cost =$13. What must be true at this level of output? a. The firm should lower the price, b. The firm should stay at
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- Given below is a production possibilities combination of a hypothetical economy producing under conditions of efficiency, contact technology, and constant level of resources. The economy is faced with 6 possible production alternatives as follows.
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- Think of the production possibilities frontier (PPF) model. When society is producing the largest possible output from its resources, it is operating a. inefficiently. b. efficiently. c. with no opportunity cost. d. inside (within) the PPF. e. beyond its
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