The production possibilities curve represents
A) the maximum amount of labor and capital available to society.
B) the combinations of goods and services among which consumers are indifferent.
C) the maximum combination of goods and services that can be produced with fixed resources and technology, given efficient use of the resources.
D) the maximum rate of growth of capital and labor in a country.
Answer: C
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If the price elasticity of demand for a product equals 1, as its price rises the
A) quantity demanded increases. B) total revenue increases. C) quantity demanded does not change. D) total revenue does not change.
Behavioral economics suggests that people face human limitations that prevent them from examining every possible choice available to them, with the implication that
A) the consumer optimum implied by utility theory is an inappropriate approach to deriving demand curves. B) the consumer optimum implied by utility theory is an appropriate approach to deriving demand curves. C) marginal utility is always equal to zero. D) marginal utility is always negative.