A Production Possibilities Frontier Shows

question 30

Multiple Choice

A production possibilities frontier shows

• A) that if price of one good decreases, the price of the other has to increase.
• B) how money can be allocated among two kinds of goods.
• C) the limits to future growth of a nation.
• D) that it is impossible to produce inefficiently.
• E) the various combinations of output a nation can produce at a certain time, given its available resources and technology.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Risk Averse

The preference for certainty and the avoidance of risk in investments or economic decisions, often leading to choices that offer lower returns in exchange for reduced risk.

Comparable Good Outcomes

Situations where two or more goods or scenarios produce similarly beneficial effects or results.

Present Value

The present value of a future amount of money or series of cash flows at a given rate of return.