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Chapter 2: Problem 6

On a production possibilities curve, a change from economic inefficiency to economic efficiency is obtained by a. movement along the curve. b. movement from a point outside the curve to a point on the curve. c. movement from a point inside the curve to a point on the curve. d. a change in the slope of the curve.

Short Answer

Expert verified
The correct answer to the question, "On a production possibilities curve, a change from economic inefficiency to economic efficiency is obtained by", is (c) Movement from a point inside the curve to a point on the curve. This is because this movement represents resources being utilized more efficiently, shifting from economic inefficiency to economic efficiency.

Step by step solution

01

Option A: Movement along the curve

Moving along the curve represents different combinations of two goods or services that can be produced with given resources and technology, assuming full employment of resources and maximum efficiency. This does not depict how a change from economic inefficiency to economic efficiency occurs.
02

Option B: Movement from a point outside the curve to a point on the curve

A point outside the production possibilities curve represents an unattainable production level with given resources and technology. So, this option does not represent a shift from economic inefficiency to economic efficiency.
03

Option C: Movement from a point inside the curve to a point on the curve

A point inside the production possibilities curve indicates that resources are not being fully employed or utilized efficiently (i.e., economic inefficiency). Moving from a point inside the curve to a point on the curve shows that resources are now being utilized efficiently (i.e., economic efficiency). Thus, this option correctly represents the shift from economic inefficiency to economic efficiency.
04

Option D: A change in the slope of the curve

A change in the slope of the curve indicates a change in the opportunity cost between the two goods or services being produced. It does not necessarily represent a shift from economic inefficiency to economic efficiency. So, the correct answer is: c. Movement from a point inside the curve to a point on the curve.

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Most popular questions from this chapter

Opportunity cost is the a. purchase price of a good or service. b. value of leisure time plus out-of-pocket costs. c. best option given up as a result of choosing an alternative. d. undesirable sacrifice required to purchase a good.

A nation can accelerate its economic growth by a. reducing the number of immigrants allowed into the country. b. adding to its stock of capital. c. printing more money. d. imposing tariffs and quotas on imported goods.

Education and training that improve the skill of the labor force are represented on the production possibilities curve by a(an) a. movement along the curve. b. inward shift of the curve. c. outward shift of the curve. d. movement toward the curve from an exterior point.

If a farmer adds 1 pound of fertilizer per acre, the value of the resulting crops rises from \(\$ 80\) to \(\$ 100\) per acre. According to marginal analysis, the farmer should add fertilizer if it costs less than a. \(\$ 12.50\) per pound. b. \(\$ 20\) per pound. c. \(\$ 80\) per pound. d. \(\$ 100\) per pound.

Which of the following decisions must be made by all economies? a. How much to produce? When to produce? How much does it cost? b. What is the price? Who will produce it? Who will consume it? c. What to produce? How to produce it? For whom to produce? d. None of the above.
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