Which of the Following Most Accurately Indicates the Implications of an Economy's

question 39

Multiple Choice

Which of the following most accurately indicates the implications of an economy's production possibilities curve?

• A) If all the resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.
• B) If all the resources of an economy are being used efficiently, it is generally possible to produce more of one good without having to sacrifice the production of other goods.
• C) Over time, it is generally impossible for a country to expand its production of goods.
• D) An economy will automatically move toward a point that lies outside of the production possibilities constraint unless proper government policy constrains production.

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Definitions:

Human Capital

Abilities, insights, and practice held by a person or community, seen through the lens of their contribution or expenditure to a corporation or state.

Physical Capital

Tangible assets that are used in the production process, such as machinery, buildings, and equipment.

Technology

The application of scientific knowledge for practical purposes, especially in industry, where it affects methods of production, communication, and transportation.

Natural Resources

Materials or substances that occur in nature which can be utilized for economic gain, such as minerals, forests, water, and fertile land.