If There Is an Increase in the Amount of Good

question 63

Multiple Choice

If there is an increase in the amount of good B foregone as every additional unit of good A is produced,the PPF between goods A and B would

• A) be a straight line.
• B) be a bowed-outward curve.
• C) be a bowed-inward curve.
• D) not exist.

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Definitions:

Risk-Free Asset

An investment guaranteed to return the original investment without any loss, typically associated with high-grade government securities.

Indifference Curve

In economics, a curve that represents different combinations of goods or services among which a consumer is indifferent, showing preferences.

Risk-Free Asset

An investment that is expected to deliver its returns without any risk of financial loss, traditionally government bonds are considered close to risk-free.

Utility

The measure of the welfare or satisfaction of an investor.