The Graph Above Shows the Production Possibilities Curve for an Economy

question 142

Multiple Choice

The graph above shows the production possibilities curve for an economy producing two goods, X and Y. All of the following may allow the economy to produce combination D in the future, except?

• A) Lower unemployment
• B) Increasing labor supply
• C) Economic growth
• D) Technological advances

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Definitions:

Resource Prices

The costs associated with acquiring the inputs or factors of production, such as labor, capital, and natural resources.

Output Increased

A scenario where production levels rise due to enhanced efficiency, greater demand, or improvements in labor and capital.

Increasing-Cost Industry

An industry in which expansion through the entry of new firms raises the prices firms in the industry must pay for resources and therefore increases their production costs.

Long-Run Supply Curve

As it applies to macroeconomics, a supply curve for which price, but not real output, changes when the demand curves shifts; a vertical supply curve that implies fully flexible prices.