All Points on the Production Possibilities Frontier

question 20

Multiple Choice

All points on the production possibilities frontier

• A) are production inefficient.
• B) achieve allocative efficiency.
• C) are production efficient but only one point achieves allocative efficiency.
• D) are allocatively efficient but only one point achieves production efficiency.
• E) are allocatively inefficient.

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Definitions:

Exports

Goods or services produced in one country and sold to buyers in another country.

Budget Surplus

A situation where income or revenues exceed expenditures over a specific period of time, typically a fiscal year.

Budget Deficit

A budget deficit happens when a government's expenditures surpass its revenues within a given fiscal period.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers at those prices.