Government failure occurs when the government runs a budget deficit.

Which one of the following will cause the production possibilities curve to shift outward?

a. improved public education b. improved health care systems c. larger budgets for research, development, and exploration d. all of the above

Assume that maximum feasible hourly productions levels if all resources are utilized in the United States are either 8 yards of fabric or 4 bushels of wheat. Maximum feasible production levels if all resources are utilized in Japan are either 3 yards of

fabric or 6 bushels of wheat. Based on this information A) beneficial trade is absolutely impossible between the two countries. B) the United States will benefit from trading but Japan will not. C) both nations will gain from specialization and trade, with the United States exporting wheat and Japan exporting fabric. D) both nations will gain from specialization and trade, with the United States exporting fabric and Japan exporting wheat.