Which of the Following Is True If an Economy Is

question 108

Multiple Choice

Which of the following is true if an economy is producing inside its production possibilities curve?

• A) There are not enough resources available to reach the curve.
• B) More output can be produced with existing resources.
• C) The available technology is limiting the level of production.
• D) The economy is producing the maximum potential output.

---

Definitions:

Real Wages

Wages adjusted for inflation, representing the purchasing power of income earned from work.

Legal Minimum Wage

The lowest hourly, daily, or monthly remuneration that employers are legally allowed to pay their workers.

Equilibrium Wage Rate

The wage rate at which the quantity of labor demanded equals the quantity of labor supplied.

Wage Rates

The fixed amount of compensation paid to employees for their labor, typically expressed as payment per hour or per month.