By Using All Available Resources and Technology the Economy Will

question 73

Multiple Choice

By using all available resources and technology the economy will:

• A) Shift aggregate supply to the right.
• B) Shift the production possibilities curve to the right.
• C) Experience long-run economic growth.
• D) Produce at a point on the production possibilities curve.

---

Definitions:

External Cost

External cost is a cost incurred by a third party who did not agree to the action that caused the cost, often seen in pollution or other forms of environmental impact.

MC

An abbreviation commonly used for "Marginal Cost," which refers to the additional cost incurred by producing one more unit of a good or service.

Liability Rule

A legal principle that allocates the economic burden of damages to the party responsible for causing harm.

Coase Theorem

A principle stating that if trade in an externality is possible and there are no transaction costs, parties will negotiate to produce an efficient outcome.