Figure 3-5 the Graph Below Represents the Various Combinations of Cars

question 164

Multiple Choice

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.)

-Refer to Figure 3-5.The fact that the line slopes downward reflects the fact that

• A)for Country A, it is more costly to produce a car than it is to produce a bushel of corn.
• B)Country A will produce more cars and fewer bushels of corn as time goes by.
• C)Country A faces a tradeoff between producing cars and producing corn.
• D)Country A should specialize in producing corn.

---

Definitions:

Leakages

In the context of economics, refers to any portion of income that is not used for domestic spending, such as savings, taxes, or imports.

Injections

In the context of an economy, Injections refer to the introduction of income into the circular flow of money, such as investments, government spending, and exports.

Circular Flow Model

An economic model illustrating the continuous flow of money, resources, and goods among households and businesses in an economy.

Value Added

The increase in worth of a product or service as a result of a particular process, typically measured as the difference between the market price and the production cost.