A typical economy produces thousands of different goods. Is it accurate to say that society faces a production possibilities frontier?
a. No, because two dimensions cannot capture the complexity of a full economy.
b. No, although a graph with several thousand dimensions would be appropriate.
c. Yes, although society does not face opportunity cost and the model does not apply.
d. Yes, because scarcity always imposes opportunity costs.
e. Uncertain-economic theory has no answer to this question.
d
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According to this Application, China's growth rate was faster than India's during this 26 year period because
A) China received more contributions from human capital than India received. B) China's growth was based more on human capital and India's growth was based more on physical capital. C) China's growth was based more on human capital and India's growth was based more on technological progress. D) China invested more in physical capital than India invested.
The saving function shows the relationship between planned real saving and
A) real wealth. B) real disposable income. C) the average propensity to save. D) the marginal propensity to save.