Refer to the Information Provided in Figure 2

question 34

Multiple Choice

Refer to the information provided in Figure 2.6 below to answer the questions that follow. Figure 2.6
-Refer to Figure 2.6. Which of the following will NOT cause the production possibility frontier to shift from ppf1 to ppf2?

• A) the discovery of previously unknown oil fields
• B) an improvement in technology
• C) an increase in the stock of capital
• D) a decrease in the unemployment rate

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.

Producer Surplus

The difference between the price that suppliers actually receive and the minimum price they would be willing to accept. It measures the net gains to producers and resource suppliers from market exchange. It is not the same as profit.

Soft Coal

Another term for bituminous coal; a type of coal known for its high moisture content and smoke-producing properties.

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the amount of the good or service that suppliers are willing and able to provide at various prices.