Exhibit 2-10 Production Possibilities Curve Data -Suppose an Economy Is Faced with the Production Possibilities Table

question 118

Multiple Choice

Exhibit 2-10 Production possibilities curve data $$\begin{array} { | l | r | r | r | r | r | } \hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Capital goods } & 0 & 1 & 2 & 3 & 4 \\\text { Consumption goods } & 25 & 23 & 19 & 13 & 0 \\\hline\end{array}$$
-Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10. As additional units of capital goods are being produced, the number of consumption goods produced must ____, because ____.

• A) increase; the production possibility table shows only the maximum efficiency points
• B) increase; of the law of increasing costs
• C) decrease; of the law of increasing costs
• D) decrease; of the finite nature of the resource base
• E) increase; capital goods will assist in the production of consumer goods

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Definitions:

Pleasure Principle

A psychoanalytic concept suggesting that individuals seek pleasure and avoid pain to satisfy their biological and psychological needs.

Optimal Arousal

A theory suggesting there is a level of arousal that is ideal for facilitating optimal performance on a task or activity.

Incentives

Rewards or stimuli that motivate individuals to perform actions or behaviors, often used to encourage desired outcomes.

Self-actualized

Being self-actualized refers to realizing and fulfilling one's potential and capabilities, as described in Maslow's hierarchy of needs.