Exhibit 2-6 Production Possibilities Frontier Data

question 60

Multiple Choice

Exhibit 2-6 Production possibilities frontier data

-As shown in Exhibit 2-6,the concept of increasing opportunity costs is reflected in the fact that:

• A)the quantity of consumer goods produced can never be zero.
• B)the labour force in the economy is homogeneous.
• C)greater amounts of capital goods must be sacrificed to produce an additional 2 units of consumer goods.
• D)a graph of the production data is a downward-sloping straight line.

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Definitions:

Market Price

The existing value at which an asset or service could be sold or bought.

Consumption

The usage of goods and services by households.

Labor Supply Decisions

The determination by individuals regarding how much they are willing to work, influenced by wages, working conditions, and personal preferences.

Market Wage

The prevailing rate of pay for workers in a specific market, determined by the supply of and demand for labor.