The Production Possibilities Curve

question 85

Multiple Choice

The production possibilities curve

• A)Represents the different quantities of goods society can consume while operating at full employment.
• B)Must shift outward every year.
• C)Is another name for the aggregate demand curve.
• D)Tends to increase as the population grows.

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Definitions:

Comparative Advantage

The ability of a country or entity to produce a specific good or service at a lower opportunity cost than others, leading to specialization in trade.

Tires

Rubber-based components that fit around the rims of wheels to provide vehicles with traction, support, and a cushion from the impact of the road.

Microchips

Small semiconductor devices containing electrical circuits that can perform calculations or store data.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive.