What causes the production possibility curve to be bowed out?
What will be an ideal response?
A bowed production possibility curve indicates increasing opportunity costs. To produce more of one good, resources must be taken away from producing another good. These resources often are specialized. This implies that the resources cannot move easily from producing one good to another. The more of a good that is produced, the more it must use resources that are better suited for the other good, and the extra costs of producing another unit of the good increase.
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Refer to the table representing Kara's bank account. Assuming that $2,000 was deposited into her account at the beginning of year 1, and no further deposits or withdrawals were made, the value for cell E:
A. cannot be determined.
B. is $2,662.
C. is $2,600.
D. is $2,200.
Effective price floors keep market price
A. above the equilibrium price and create surpluses. B. above the equilibrium price and create shortages. C. below the equilibrium price and create surpluses. D. below the equilibrium price and create shortages.