Figure 2-14 Consider the Production Possibilities Curve for a Country

question 126

Multiple Choice

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels) ,or a combination of the two
-Refer to Figure 2-14.If this society is producing at point T,

• A)there is unemployment.
• B)production is efficient.
• C)growth can only be achieved through an advancement in technology.
• D)the opportunity cost of producing one more sweater is approximately 40 bushels of apples.

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Definitions:

Producer Surplus

The divergence between what producers are prepared to agree on for a sale of goods or services and the resultant financial gain.

Consumer Surplus

represents the difference between what consumers are willing to pay for a good or service and what they actually pay, indicating economic welfare.

Tax Revenue

The income generated by the government through the imposition of taxes on goods, services, income, and transactions.

Opportunity Costs

The cost of the next best alternative foregone when a decision is made to choose one option over another.