If Sam Is Producing at a Point on His Production

question 154

Multiple Choice

If Sam is producing at a point on his production possibilities frontier, then he

• A) cannot produce any more of either good.
• B) can produce more of one good only by producing less of the other.
• C) will be unable to gain from trade.
• D) is not subject to scarcity.

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Definitions:

Income

The money received, especially on a regular basis, for work or through investments.

Wages

Wages are the compensation paid to employees for their labor, often calculated on an hourly, daily, or piecewise basis.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, opposite to normal goods.

Quantity Demanded

The total amount of a good or service consumers are willing and able to purchase at a given price level.