Exhibit 2-3

question 154

Multiple Choice

Exhibit 2-3
-Point g in Exhibit 2-3 is efficient because

• A)the only way to increase production of A is by decreasing production of B
• B)the economy can increase production of both A and B from point b
• C)it is impossible to move to any other point along the production possibilities frontier
• D)it is impossible to move to any other point inside the production possibilities frontier
• E)no other production possibilities frontier exists

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Definitions:

Purchasing Power

An individual's or entity's ability to buy goods and services, affected by inflation and personal financial situation.

Hourly Rate

The sum of money received or given out for every hour worked.

Toxic Waste Discharge

The release of harmful pollutants into the environment, usually from industrial operations.

Stringent Restrictions

Strict or severe limitations or rules that must be followed.