The figure above illustrates a small country's production possibilities frontier. Based on the figure, we can tell that the nation's resources are
A) not equally productive in all tasks because the production possibilities frontier is bowed out.
B) unlimited because the slope is negative and the PPF is bowed out.
C) equally productive in all tasks because the slope is negative.
D) not equally productive in all tasks because the slope is negative.
E) equally productive in all tasks because the production possibilities frontier is bowed out.
A
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The Lucas critique is an attack on the usefulness of
A) conventional econometric models as forecasting tools. B) conventional econometric models as indicators of the potential impacts on the economy of particular policies. C) rational expectations models of macroeconomic activity. D) the relationship between the quantity theory of money and aggregate demand.
When a financial institution hedges the interest-rate risk for a specific asset, the hedge is called a
A) macro hedge. B) micro hedge. C) cross hedge. D) futures hedge.