The Production Possibilities Curve Shows

question 73

Multiple Choice

The production possibilities curve shows:

• A)the minimum production of one good for every possible production level of the other good.
• B)how increasing the resources used to produce one good increases the production of the other good.
• C)the maximum production of one good for every possible production level of the other good.
• D)how increasing the production of one good allows production of the other good to also rise.

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Definitions:

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.

Product Demand Curves

Graphical representations showing the relationship between the price of a product and the quantity of the product demanded.

Normal Profit

The minimum profit necessary for a company to remain competitive in the market; it occurs when total revenue equals total costs.

Normal Profit

The profit level that allows a business to remain competitive in the market, covering its opportunity costs.