15. A PPF curve is based on the assumptions that resources are fixed and fully employed and technology advances at the rate of the overall growth of the economy. O True False 6. If an economy can produce various combinations of food and shelter along a production possibilities curve (PPC), then if we increase the production of housing along the PPC, which of the following is correct? O a. We also increase the production of food. O b. We must decrease the production of food. This foregone food production represents the opportunity cost of the increase in the shelter. O c. We cannot change the production of food. O d. None of the above.
15. A PPF curve is based on the assumptions that resources are fixed and fully employed and technology advances at the rate of the overall growth of the economy. O True False 6. If an economy can produce various combinations of food and shelter along a production possibilities curve (PPC), then if we increase the production of housing along the PPC, which of the following is correct? O a. We also increase the production of food. O b. We must decrease the production of food. This foregone food production represents the opportunity cost of the increase in the shelter. O c. We cannot change the production of food. O d. None of the above.
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section: Chapter Questions
Problem 8SQ
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Transcribed Image Text:15. A PPF curve is based on the assumptions that resources are fixed and fully
employed and technology advances at the rate of the overall growth of the
economy.
True
O False
6. If an economy can produce various combinations of food and shelter along a
production possibilities curve (PPC), then if we increase the production of
housing along the PPC, which of the following is correct?
a. We also increase the production of food.
b. We must decrease the production of food. This foregone food production
represents the opportunity cost of the increase in the shelter.
Oc. We cannot change the production of food.
Od. None of the above.
5. Combinations of goods outside the production possibilities curve (PPC) have
which of the following characteristics?
a. They are only attainable today if we employ all unemployed or underemployed
resources.
O b. They are not attainable given our existing stock of resources and technology.
c. They imply that some resources, such as labor, are unemployed or
underemployed.
Od. None of the above.
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