In a Graph of the Production Possibilities Curve, the Two

question 227

Multiple Choice

In a graph of the production possibilities curve, the two axes of the graph indicate the

• A) prices of the two products that a nation can produce.
• B) maximum quantities of the two resources that a nation possesses.
• C) price of the products on the vertical axis, and quantities on the horizontal.
• D) quantities of the two products that a nation can produce.

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Definitions:

Mixed Strategy

Strategy in which a player makes a random choice among two or more possible actions, based on a set of chosen probabilities.

Game Theory

A mathematical and economic theory that analyzes the strategic interactions among rational decision-makers.

Homogeneous Good

A product that is considered identical or uniform across producers and can be easily substituted.

Annual Profit

The total earnings a business has after subtracting all expenses over a year.