The Figure Given Below Represents the PPC in Two Nations

question 68

Multiple Choice

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4

-Given that resources can be allocated by the government, the market, a random process, or on a first-come first-serve basis, which of the following statements is true?

• A)The market system is not entirely fair but it creates incentives to increase supplies and improve standards of living.
• B)The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own.
• C)Since the government system does not distinguish between those who have income and those that do not, government allocation of resources is the most efficient.
• D)There will be no shortages under the first-come first-serve basis of allocation.
• E)A random process of allocation is fair in the sense that everyone gains and there are no losers.