The Production Possibilities Curve Illustrates the Basic Principle That

question 341

Multiple Choice

The production possibilities curve illustrates the basic principle that

• A) the production of more of any one good will in time require smaller and smaller sacrifices of other goods.
• B) an economy will automatically obtain full employment of its resources.
• C) if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced.
• D) an economy's capacity to produce increases in proportion to its population size.

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Definitions:

Businesses

Organizations engaged in the provision of goods or services with the primary aim of making a profit.

Tradable Pollution

A system where companies or countries can buy or sell allowances to emit a certain amount of pollutants, with the aim of reducing overall emissions.

Cap-And-Trade

An environmental policy tool that limits greenhouse gas emissions by allocating emission allowances and permitting the trading of these allowances among emitters.

Market Approach

An economic method that determines the value of a business, business ownership interest, or security using one or more methods that compare the subject to similar businesses, business ownership interests, or securities that have been sold.