Figure 51 the Figure Shows a Linear Production Possibility Curve Representing

question 10

Multiple Choice

Figure 5.1. The figure shows a linear production possibility curve representing a tradeoff faced by a country, between necessities and luxuries​.
-Which of the following is ​a possible cause of an increase in profit from the sale of goods and services?

• A)​A decrease in the per capita income of consumers
• B)​A decrease in the price of a substitute good or a service
• C)​An increase in the availability of raw materials
• D)​A decrease in the price of a good or service, everything else held constant
• E)​An increase in the price of a good or service, everything else held constant

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Definitions:

Laspeyres Price Index

A measure of price inflation or deflation for a specified set of goods and services, using the quantities of the base year as weights.

Ideal Cost-Of-Living Index

Cost of attaining a given level of utility at current prices relative to the cost of attaining the same utility at base-year prices.

Paasche Index

An economic measure that calculates the change in the cost of purchasing a specified basket of goods and services in a given year compared to a base year, using current-period weighting.

Nominal Income

The amount of money earned in current dollars, not adjusted for inflation.