Exhibit 2-4 Production possibilities curve data
A
B
C
D
E
Capital goods 0
10
20
30
40
Consumer goods200
180
140
80
0
In Exhibit 2-4, if the economy chooses production possibility D rather than production possibility B, it can expect
A. less growth in the future because it will use up its consumer goods.
B. more growth in the future because of the accumulation of capital.
C. the same amount of growth in the future but with a lower standard of living.
D. the same amount of growth in the future but with a higher standard of living.
Answer: B
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A market equilibrium occurs
A) only with government regulation. B) only because of the profit motive of firms. C) only because of the complacency of consumers. D) through the interaction of self-interested consumers and producers.
When a new generation of computers, which are faster and more powerful than the previous generation, is introduced into the resource market:
a. many firms do not change their demand for capital. b. many firms increase their demand for capital. c. many firms decrease their demand for capital. d. the quantity demanded of capital declines. e. the quantity demanded of capital increases.