A graph showing all the combinations of goods and services that can be produced if all of society's resources are used efficiently is a ?
Correct answer: D. Production possibility curve.
- A. capital consumption frontier.
- B. Lorenz curve.
- C. Circular-flow diagram.
- D. Production possibility curve.
Explanation
A production possibility curve shows the maximum combinations of two goods or services that can be produced when available resources are used efficiently. The Lorenz curve instead describes income or wealth distribution.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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