An outward shift of the production possibilities frontier
a. reflects economic stability
b. reflects economic growth
c. reflects economic decline
d. does not relate to the state of the economy
e. is always a parallel shift
QUESTION 2The production possibilities frontier can be used to show all of the following except one. Which is the exception?
a. scarcity
b. opportunity cost
c. the law of increasing opportunity cost
d. efficiency
e. the best combination of goods and services for an economy
QUESTION 3The reason that the production possibilities frontier is usually a bow-shaped curve instead of a straight line is that
a. it makes it easier to illustrate the concepts of scarcity and prices with a bow-shaped curve than it is with a straight line
b. early economists began drawing them in this way and the convention has continued throughout the years
c. output eventually reaches a maximum and then declines
d. resources are not perfectly adaptable to the production of all goods
e. the frontier will shift outward over time
QUESTION 4The production possibilities frontier represents all desirable combinations of two goods
a. True
b. False
QUESTION 5The production possibilities frontier will shift if there is a change in
a. technology
b. unemployment
c. product prices
d. society's preferences for commodities
e. the quantities of the two goods being produced
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