A Nation That Devotes More of Its Resources to the Production

question 354

Multiple Choice

A nation that devotes more of its resources to the production of capital goods rather than consumer goods is likely to

• A) cause its production possibilities curve to shift outward.
• B) cause its production possibilities curve to shift inward.
• C) increase the slope of its production possibilities curve.
• D) decrease the slope of its production possibilities curve.

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Definitions:

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of the good that suppliers are willing to sell.

Tax on Buyers

A financial charge imposed directly on purchasers, affecting the demand side by potentially reducing the quantity of goods or services bought.

Sellers Receive Less

A situation where suppliers earn less revenue than expected due to market factors such as decreased demand or increased competition.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied by producers.