Chapter Questions
Which point(s) on the graph represent productive efficiency?a. $B$ and $C$b. $A$ and $D$c. $A, B, C$, and $D$d. $A, B, C, D$, and $E$e. $A, B, C, D, E$, and $F$
For this economy, an increase in the quantity of capital goods produced without a corresponding decrease in the quantity of consumer goods produceda. cannot happen because there is always an opportunity cost.b. is represented by a movement from point $E$ to point $A$.c. is represented by a movement from point $C$ to point $B$.d. is represented by a movement from point $E$ to point $B$.e. is only possible with an increase in resources or technology.
An increase in unemployment could be represented by a movement from pointa. $D$ to point $C$.b. $B$ to point $A$.c. $C$ to point $F$.d. $B$ to point $E$.e. $E$ to point $B$.
Which of the following might allow this economy to move from point $B$ to point $F$ ?a. more workersb. discovery of new resourcesc. building new factoriesd. technological advancese. all of the above
This production possibilities curve shows the tradeoff between consumer goods and capital goods. Since capital goods are a resource, an increase in the production of capital goods today will increase the economy's production possibilities in the future. Therefore, all other things equal (ceteris paribus), producing at which point today will result in the largest outward shift of the $P P C$ in the future?a. $A$b. $B$c. $C$d. $D$e. $E$