Use the Figure Below to Answer the Following Questions

question 147

Multiple Choice

Use the figure below to answer the following questions.

Figure 2.1.2
-Consider the production possibilities frontier in Figure 2.1.2. Which of the following statements is false?

• A)Resources are not equally useful in all activities.
• B)Points inside the production possibilities frontier indicate unused or misallocated resources.
• C)Starting at point A, an increase in the production of Y will shift the production possibilities frontier outward.
• D)The opportunity cost of producing Y increases as production of Y increases.
• E)The opportunity cost of producing X increases as production of X increases.

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Definitions:

Recessions

Temporary economic slumps marked by diminished business and manufacturing activities, conventionally defined by a sequential fall in GDP during two quarters.

Economy

The economy encompasses all activity related to production, consumption, and trade of goods and services in an area, involving various sectors such as agriculture, manufacturing, and services.

Keynesian

Relating to the economic theories of John Maynard Keynes, focusing on how aggregate demand influences economic output and inflation.

Classical Economic Systems

An economic framework based on free markets, limited government intervention, and the belief in the efficiency of market outcomes as guided by invisible hand principles.