If an economy is operating at a point inside the production possibilities frontier, then
a. some of the nation's resources are unemployed
b. the production decisions are made by the government
c. unlimited resources must satisfy scarce desires
d. there is a scarcity of human resources relative to human wants therefore society must have some mechanism for making choices
e. society is paying too much for wages
QUESTION 2Along a bowed-out production possibilities frontier, as more of one good is produced,
a. the opportunity cost of producing that good remains constant
b. the opportunity cost of producing that good decreases
c. efficiency decreases
d. the opportunity cost of producing both goods must remain constant
e. technology remains constant
QUESTION 3The typical concave (i.e., bowed-out) shape of the production possibilities frontier reflects the law of increasing opportunity cost.
a. True
b. False
QUESTION 4The bowed-out shape of the production possibilities frontier indicates increasing opportunity costs.
a. True
b. False
QUESTION 5A point inside the production possibilities curve illustrates a situation in which resources are not fully employed
a. True
b. False
QUESTION 6Points outside the production possibilities frontier represent
a. unemployment of resources
b. inefficient use of resources
c. combinations that are attainable only if all resources are used fully and efficiently
d. currently unattainable combinations of outputs
e. the only currently attainable combinations from which society must choose
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