When Can a Country's Consumption Possibilities Frontier Be Outside Its

question 30

Multiple Choice

When can a country's consumption possibilities frontier be outside its production possibilities frontier?

• A) if additional resources become available
• B) if there is an increase in the level of technology
• C) if the country engages in trade
• D) if resources are adaptable.

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Definitions:

Highly Elastic

Referring to a situation where the quantity demanded or supplied responds significantly to changes in price.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded by consumers over a period of time.

Consumer Surplus

The difference between the maximum price consumers are willing to pay and the price they actually pay. It is the net gain derived by the buyers of the good.

Cell-Phone Service

A service provided by telecommunications companies that enables mobile phone users to make and receive calls, texts, and use data.