Define the utility possibilities frontier. Explain what it means when society is inside the utility possibilities frontier. Explain what it means when society is on the utility possibilities frontier
Explain what determines the point that society arrives at on the utility possibilities frontier.
The utility possibilities frontier is a graphical representation of a two-person world that shows all points at which A's utility can be increased only if B's utility is decreased. A point inside the utility possibilities frontier is inefficient, because at that point it would be possible to make both people better off. A point on the utility possibilities frontier is efficient. The point on the utility possibilities frontier that society arrives at is determined by the individuals' initial endowments of wealth and skills.
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A Rolling Stones song goes: "You can't always get what you want." This echoes an important theme from microeconomics. Which of the following statements is the best example of this theme?
A. Consumers must make the best purchasing decisions they can, given their limited incomes. B. Firms in market economies have limited financial resources. C. Workers do not have as much leisure as they would like, given their wages and working conditions. D. Workers in planned economies, such as North Korea, do not have much choice over jobs.
The following are all final goods EXCEPT
A) flour used by the baker to make cupcakes. B) bread eaten by a family for lunch. C) pencils used by a 6th grader in class. D) Nike shoes used by a basketball player. E) a computer used by Intel to design new computer chips.