If an Economy Is Operating at a Point Inside the Production

question 81

Multiple Choice

If an economy is operating at a point inside the production possibilities frontier, then

• A)some of the nation's resources are unemployed
• B)the production decisions are made by the government
• C)unlimited resources must satisfy scarce desires
• D)there is a scarcity of human resources relative to human wants therefore society must have some mechanism for making choices
• E)society is paying too much for wages

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Definitions:

Residential Neighborhoods

Areas primarily containing housing where people live, often differentiated by types of housing, socioeconomic status, and urban planning.

Externalities

Negative or positive impacts on third parties stemming from business operations, which are not accounted for in the pricing of products or services.

Market Equilibrium

A state in a market where the quantity supplied equals the quantity demanded, leading to a stable market price and no excess supply or demand.

Total Benefit

The complete gain obtained from consuming a good or service.