Two Reasons Why an Economy Might Operate Inside of Its

question 114

Multiple Choice

Two reasons why an economy might operate inside of its production possibilities frontier are

• A) productive efficiency and technological change
• B) depressions and inflation
• C) recessions and productive inefficiency
• D) opportunity costs and substitutability of resources used in production
• E) productive inefficiency and a decrease in the state of technology

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Definitions:

Price Rise

An increase in the cost of goods or services, often reflecting factors like inflation, increased production costs, or higher demand.

Units of Y

Quantitative measures of a variable Y, often used in economics to denote quantity or amount.

Units of X

The quantity of a particular good or service being referred to or utilized in an economic context.

Original Bundle

In economics, this refers to a specific combination of goods that a consumer initially chooses given their budget and prices.