What does the vertical intercept of a production possibilities ...

[imanialler]

What does the vertical intercept of a production possibilities frontier represent?
 
  What will be an ideal response?

Question 2

If the interest rate on student loans ________, students will ________.
 
  A) falls from 6 percent to 1 percent; not change their saving but will change their investment
  B) rises from 6 percent to 12 percent; increase their consumption before it becomes too expensive
  C) rises from 6 percent to 12 percent; increase their saving in order to pay back the loan sooner
  D) falls from 6 percent to 1 percent; increase their saving in order to pay back the loan sooner
  E) None of the above answers is correct.

[k.lashomb]

Answer to Question 1

The vertical intercept is the maximum amount that can be produced if all available resources are dedicated to the production of the good or service measured on the vertical axis.

Answer to Question 2

C