Figure 2-12 -Refer to Figure 2-12.The Shift of the Production Possibilities Frontier

question 197

Multiple Choice

Figure 2-12
-Refer to Figure 2-12.The shift of the production possibilities frontier from A to B can best be described as

• A)a downturn in the economy.
• B)economic growth.
• C)an enhancement of equality.
• D)an improvement in the allocation of resources.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity can dictate prices.

External Benefit

A benefit that an activity or transaction provides which is not captured by the consumer or producer, benefiting others in society.

Public Good

A product or service that is made available to all members of a society, typically funded by the government, and characterized by non-excludability and non-rivalry.

External Cost

represents a negative spillover effect of an economic transaction on a third party who was not involved in the transaction.