Author Question: The nation's production possibilities frontier is bowed outward. Suppose that the government decides ... (Read 115 times)

stock · **on:** Jun 29, 2018

The nation's production possibilities frontier is bowed outward. Suppose that the government decides to increase the production of armaments by 20 billion, and that as a result the output of consumer goods falls by 20 billion.

If a further 20 billion increase beyond the initial 20 billion increase in armaments output is sought, we can expect that the output of consumer goods and services will fall further by A) less than 20 billion.
B) 20 billion.
C) more than 20 billion.
D) There is not enough information to determine the answer.

Question 2

Which of the following is an example of an ordinary private good?

A) Furniture
B) The Internet
C) Water
D) Cable TV