-Using Figure 1

question 48

Multiple Choice

-Using Figure 1.5 above we know the production of 6 units of soda and 2 units of pizza is

• A)possible, but there would be unemployed resources.
• B)possible, but only if all resources were fully employed.
• C)impossible because we either do not have the resources or the technology.
• D)undesirable.

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Definitions:

Utility Functions

Mathematical representations describing the level of satisfaction or utility that a consumer derives from consuming a good or combination of goods.

Equilibrium

A state of balance in a market, where demand equals supply, and economic forces are at rest.

Welfare Economics

Normative evaluation of markets and economic policy.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.