The Production Possibilities Curve for the Nation of Economagic Shifts

question 35

Multiple Choice

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

• A) an increase in Economagic's labor supply.
• B) innovation in the production of goods in Economagic.
• C) a war that destroyed some of Economagic's resource base.
• D) unemployment among Economagic's workers.
• E) Economagic's choice of more consumption and less capital last period.

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Definitions:

Net Present Value

A calculation used to evaluate the profitability of an investment, subtracting the present values of cash outflows from the present values of cash inflows.

Binary Variable

A variable that takes on one of exactly two possible values, typically represented or coded as 0 and 1.

Processes

A series of actions or steps taken in order to achieve a particular end, often referring to sequences in manufacturing or computation.

Solver

A computational tool used in spreadsheet programs to find optimal solutions to complex decision-making problems by changing multiple variables.