Use the Following to Answer Question

question 25

Multiple Choice

Use the following to answer question:

-(Figure: Guns and Butter) Use Figure: Guns and Butter.On this figure,points A,B,E,and F:

• A)indicate combinations of guns and butter that society can produce using all of its factors efficiently.
• B)indicate increasing opportunity costs for guns but decreasing opportunity costs for butter.
• C)indicate that society wants butter more than it wants guns.
• D)indicate constant opportunity costs for guns and increasing costs for butter.

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Definitions:

Perfectly Elastic

A situation in economics where the quantity demanded or supplied changes infinitely in response to any change in price, typically represented with a horizontal demand or supply curve.

Relatively Inelastic

A term used to describe a situation where the demand or supply for a good or service is less responsive to changes in price.

Total Revenue

The total income that a company receives from its normal business activities, usually from the sale of goods and services to customers.

Inelastic Demand

A situation where the quantity demanded of a good or service changes little when its price changes.