Use the Following to Answer Questions

question 205

Multiple Choice

Use the following to answer questions:
Figure: Strawberries and Submarines
-(Figure: Strawberries and Submarines) Look at the figure Strawberries and Submarines. Suppose the economy is operating at point G. This implies that:

• A)the economy can move to a point such as C only if it improves its technology.
• B)the economy has unemployment and/or inefficiently allocates resources.
• C)the economy lacks the resources to achieve a combination such as C.
• D)people in this economy don't really like strawberries or submarines.

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Definitions:

Dynamic Process

A system or sequence of actions characterized by continuous change, activity, or progress over time.

Decision Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Barriers To Entry

Obstacles that make it difficult for new competitors to enter a market, including high start-up costs, regulatory requirements, and established brand loyalty.

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, representing an excess return over and above normal profits.