The Production Possibilities Boundary Shows Possible Combinations of Guns and Butter

question 102

Multiple Choice

The production possibilities boundary shows possible combinations of guns and butter that can be produced by a country.The lower diagram shows demand and supply for butter. FIGURE 12-2
-Refer to Figure 12-2.Suppose this economy is allocatively efficient at Q₁ units of butter.Now suppose there is an increase in demand for butter from D to D₁.After this shift in demand,

• A)the supply curve will shift up to S₁ and allocative efficiency will be maintained.
• B)the marginal value to consumers of butter is less than the marginal cost to producers; the price of butter (relative to the price of guns)rises; the economy moves to output Q₂ of butter and point (c)on the PPB.
• C)the marginal value to consumers of butter is greater than the marginal cost to producers; the price of butter (relative to the price of guns)rises; the economy moves to output Q₂ of butter and point (c)on the PPB.
• D)the increase in the price of butter (relative to the price of guns)will cause the demand curve to shift back down to D and allocative efficiency will be maintained.
• E)the price of guns (relative to the price of butter)rises and the economy moves to point (a)on the PPB.

Distinguish between the various needs and drives as explained by different motivation theories.

Comprehend the relationship between motivation theories and employee performance.

Explore the evolution of motivation theories over time and their contemporary relevance.

Understand the principles of creating and formatting a list effectively.

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Definitions:

Reselling

The act of selling a product or service again, typically after buying it from the original seller.

Demand Elasticities

Various measures that quantify the sensitivity of demand for a good or service to changes in its price or other relevant factors.

Producing Cost

The total expense incurred in the creation of goods or services, including raw materials, labor, and overhead expenses.

Identical Preferences

The condition wherein all consumers or individuals prioritize goods, services, or outcomes in the same order, assuming homogeneity in tastes and desires.