The production possibility curve:
A. is based on the law of diminishing returns.
B. is convex to the origin.
C. is the boundary between attainable and unattainable outputs.
D. reflects the mixed economy found with most economic systems.
Answer: C
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Which of the following is an example of a compensating wage differential?
A) Workers in a dynamite mine receive higher wages than if they worked in other jobs that require the same level of skills. B) Nurse anesthetists are paid less than anesthesiologists (who have medical degrees). C) In the market for lawyers, top graduates from the top programs earn starting salaries that are significantly higher than the starting salaries earned by lower-ranked graduates from the lower-ranked programs. D) Popular movie stars like George Clooney command much higher salaries than other talented but lesser-known actors.
Compare and contrast the four market models in terms of the profit-maximizing output level for each, the shut-down rule for each, the probability of long-run economic profits being earned, and their social desirability