(Figure: Production Possibilities) Which Statement Is NOT Correct Regarding Point

question 218

Multiple Choice

(Figure: Production Possibilities) Which statement is NOT correct regarding point X?

• A) The combination produced at point X is productively efficient.
• B) Society might prefer other combinations on the line to the mix of output a point X.
• C) Because it is on the line, combination at point X has no opportunity cost.
• D) The combination of output at point X might not be allocatively efficient.

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Definitions:

Price

The amount of money expected, required, or given in exchange for an item or service in a market.

Normal Good

A good for which demand increases as the income of consumers increases, and vice versa.

Income

Revenue generated on a regular basis from labor or investments.

Demand Curve

A graph showing how the quantity demanded of a commodity changes as its price varies.