The PPF Between Goods X and Y Will Be a Downward-Sloping

question 39

Multiple Choice

The PPF between goods X and Y will be a downward-sloping

• A) straight line if increasing opportunity costs exist.
• B) straight line if decreasing opportunity costs exist.
• C) curve that is bowed inward if increasing opportunity costs exist.
• D) straight line if constant opportunity costs exist.

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Definitions:

Risk Diversified

The strategy of spreading investments across various assets to reduce exposure to risk in any single area.

Expected Income

The amount of income an individual anticipates or forecasts to receive over a certain period.

Probability

A numeric evaluation representing the probability of an event taking place, where 0 signifies no chance and 1 signifies certainty.

Expected Income

The weighted average of all possible income outcomes, where the weights are the probabilities of each outcome occurring.