Which of the Following Is Assumed in Constructing a Typical

question 366

Multiple Choice

Which of the following is assumed in constructing a typical production possibilities curve?

• A) The economy is using its resources inefficiently.
• B) Resources are perfectly shiftable among alternative uses.
• C) Production technology is fixed.
• D) The economy is engaging in international trade.

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Definitions:

Price Elasticity of Demand

A measure of the sensitivity of quantity demanded to a change in price, indicating how much the quantity demanded of a good will change when its price changes.

Market Power

The ability of a company or group of companies to manipulate or control prices and total market output.

Oligopolistic

Pertaining to a market structure characterized by a small number of firms whose actions and policies can significantly impact the entire market.

Perfect Competition

A market structure characterized by many buyers and sellers, homogeneous products, free entry and exit, and full information.