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production possibilities curve

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1. A production possibilities curve
a. that shows opportunity cost is a straight line.
b. has time on one axis and space on the other.
c. cannot be used to explain one of two alternatives for a nation.
d. shows we are faced with scarcity.

2. The principle of increasing marginal opportunity cost
a. means one derives less and less satisfaction from the increased consumption of any good or service.
b. means that in order to get more of one thing, one must give up ever-increasing amounts of something else.
c. means that an economy always produces the most output with its inputs.
d. applies to the production of private goods but not goods produced by the government.

3. An economy is producing efficiently only if it is operating
a. outside the production possibility curve.
b. inside the production possibility curve.
c. on the production possibility curve.
d. at the x- or y-axis intercepts of the production possibility curve.

4. The opportunity cost of changing your decision on what to major in college is highest
a. before you have earned any of the credits needed to obtain the major you initially chose.
b. after you have officially declared a major.
c. after you have earned ½ of the credits to obtain the major you initially chose.
d. after you have completed your major and received your diploma.

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Notes explain production possibilites curves.

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