If the production possibilities curve is a straight line, then:
a. The opportunity cost of producing one good is zero.
b. Society can produce more of both goods simultaneously.
c. The law of increasing opportunity costs does not apply.
d. Society is capable of producing only one of the goods and not the other.
2. If there's a huge increase in the number of Americans travelling to Europe (say, for the Olympics), then the effect on the foreign exchange market is that the:
a. Supply of euros would increase.
b. Demand for euros would increase.
c. Supply of euros would decrease.
d. Demand for euros would decrease.