When an economy is operating efficiently, which is TRUE?
A) All resources are fully employed.
B) It would be possible to increase the output of 1 good without decreasing the output of the other.
C) Resources are not fully employed or current technology is not being fully utilized.
D) This economy is operating to the right of its production possibilities curve (PPC).
A
You might also like to view...
Large sport utility vehicles (SUVs) add significantly to air pollution because they do not have to meet passenger auto emission standards. The purchase of an SUV
a. adds less to GDP since the pollution costs are subtracted from GDP. b. adds to nominal but not real GDP because of the pollution costs. c. is a net loss to GDP because the pollution costs are so large. d. increases GDP.
Owen and Simon both like playing with balls and cars. Suppose B represents the number of balls, and C represents the number of cars. If Owen's utility function can be given by U(B, C) = 10B + 5C, and Simon's utility function can be given by U(B, C) = 6B + 6C, which of the following trades would be mutually beneficial?
A. Owen gives Simon 3 cars in exchange for 2 balls B. Owen gives Simon 2 cars in exchange for 3 balls C. Owen gives Simon 3 balls in exchange for 2 cars D. Owen gives Simon 2 balls in exchange for 3 cars