Refer to the table above, which gives five points on a nation's PPF. The production of 7 units of X and 28 units of Y is
A) impossible given the available resources.
B) possible but leaves some resources less than fully used or misallocated.
C) on the production possibilities frontier between points c and d.
D) on the production possibilities frontier between points b and c.
B
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By offering more generous unemployment insurance programs, European countries can expect
A) workers to gain new skills quickly in response to fluctuations in the labor market. B) longer periods of unemployment for their workers. C) to pay less in taxes than in the United States. D) shorter periods of unemployment for their workers.
Which of the following is not one of the strengths of the Cobb-Douglas production function?
A) Both marginal product and returns to scale can be estimated from it. B) It can be converted into a linear function for ease of calculation. C) It shows a production function passing through increasing returns to constant returns and then to decreasing returns. D) The sum of the exponents indicates whether returns to scale are increasing, constant or decreasing.