The Fact That We Cannot Operate at a Point Outside

question 84

Multiple Choice

The fact that we cannot operate at a point outside a production possibilities frontier indicates there is

• A)scarcity.
• B)constant opportunity cost.
• C)unemployment.
• D)increasing opportunity cost.

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Definitions:

Marginal Rate of Substitution

The rate at which one good can be substituted for another by a consumer without affecting their overall utility level.

Wheat

A cereal grain grown worldwide and a staple food for a large part of the world's human population, used to make products like bread, pasta, and couscous.

Milk

A nutrient-rich fluid produced by the mammary glands of mammals, commonly consumed by humans and used in a variety of food products.

Pareto Optimal

A state of allocation of resources from which it is impossible to reallocate to make any individual or preference criterion better off without making at least one individual or preference criterion worse off.