If a Country's Production Possibilities Boundary Is Drawn as a Straight

question 62

Multiple Choice

If a country's production possibilities boundary is drawn as a straight (downward-sloping) line it indicates

• A)decreasing opportunity cost of producing more of either good.
• B)the use of the scarce resources in an economy.
• C)constant opportunity cost of producing more of either good.
• D)an unfair distribution of resources in an economy.
• E)increasing opportunity cost of producing more of either good.

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Definitions:

Efficiency Wage

A higher-than-market wage that a firm pays to increase worker productivity and reduce turnover.

Penalize Shirking

Involves imposing consequences on employees or agents who reduce their effort or productivity, often seen in economic models of labor markets.

Efficiency Wage

A higher-than-market wage paid by employers to increase productivity and efficiency among workers by motivating them and reducing turnover.

Market-clearing Wage

The pay rate where the amount of labor offered matches the amount of labor required.