FIGURE 1-5 -Refer to Figure 1-5.Suppose That the Relevant Production Possibilities Boundary

question 23

Multiple Choice

FIGURE 1-5
-Refer to Figure 1-5.Suppose that the relevant production possibilities boundary is the one labelled B.This boundary implies that

• A)the concept of opportunity cost is not at work in this economy.
• B)the opportunity cost of producing either capital goods or consumer goods does not depend on how much of each good is produced.
• C)consumer goods are preferred to capital goods.
• D)in this society the resources are not efficiently employed.
• E)capital goods are preferred to consumer goods.

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Definitions:

Real Assets

Assets used to produce goods and services such as land, buildings, and equipment.

Land

A factor of production that refers to the natural resources available for producing goods and services, including physical space and environmental resources.

Machines

Mechanical or electronic devices operating independently or with minimal human intervention, often used in manufacturing or processing.

Knowledge

Information, understanding, or skills acquired through experience or education.