Suppose Someone Is Studying a Production Possibilities Frontier (PPF)that Has

question 102

Multiple Choice

Suppose someone is studying a production possibilities frontier (PPF) that has a bowed-out shape relative to the origin.What causes this shape?

• A) economic growth
• B) the law of increasing relative cost
• C) absolute advantage
• D) normative economics
• E) more resources

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Definitions:

Total Cost

The aggregate monetary value of all inputs used in the production of goods or services, including fixed and variable costs.

Pollution Permits

Licenses issued by governments that allow the holder to emit a certain amount of pollutants; used as a means to control environmental pollution.

Pollution Reduction

Initiatives or approaches focused on reducing the level of pollutants emitted into the surroundings.

Pollution Permits

Certificates that allow entities to emit a certain amount of pollutants; can be bought, sold, or traded in a regulatory market.