The Production Possibilities Curve Shows

question 161

Multiple Choice

The production possibilities curve shows:

• A) the various combinations of two goods that can be produced when society employs all of its scarce resources.
• B) the minimum outputs of two goods that will sustain a society.
• C) the various combinations of two goods that can be produced when some resources are unemployed.
• D) the ideal,but unattainable,combinations of two goods that would maximize consumer satisfactions.

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Definitions:

Expected Value

The weighted average of all possible values that a random variable can take on, weighted by the probabilities of those values.

Payoffs

The outcomes or returns of a decision or action, often expressed in terms of profit or loss.

Risky Undertaking

An action or venture involving a high degree of uncertainty and potential for loss or failure.

Net Profit

The amount of money that remains from revenues after all expenses, taxes, and costs have been subtracted.