Suppose the Economy Goes from a Point on Its Production

question 128

Multiple Choice

Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF.Assuming that the PPF has not shifted,this could be due to

• A) a gain of resources.
• B) a loss of resources.
• C) technological improvement in the production of both goods.
• D) an increase in unemployment of some resources.

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Definitions:

Alternative Hypothesis

It is a statement that suggests there is a difference or effect in the population parameters being studied, contradicting the null hypothesis.

Level of Significance

Refers to the probability threshold below which the null hypothesis is rejected, indicating the degree of evidence required to conclude that an effect is statistically significant.

Type I Error

The mistaken disapproval of a valid null hypothesis, commonly referred to as a "false positive."

Null Hypothesis

A statement in hypothesis testing that assumes no significant difference or effect, serving as a default position until evidence indicates otherwise.