In a production possibilities frontier graph, the cost of ...

[mydiamond]

In a production possibilities frontier graph, the cost of producing more units of a good is measured by the
 
  A) dollar value of the additional output.
  B) area in the arc between the PPF and a straight line drawn between the starting point and the ending point.
  C) dollar value of the resources used to produce the good.
  D) amount of the other good or service that must be forgone.
  E) None of the above answers is correct.

Question 2

In the figure above, what happens if the Fed increases the quantity of money by 8 percent?
 
  A) The interest rate rises to 1.08.
  B) The value of money rises to 1.08.
  C) The value of money falls to 0.92 and there is a movement downward along the LRMD.
  D) The LRMD curve shifts rightward to restore equilibrium.
  E) The price level falls to 1.08.

[nmyers]

Answer to Question 1

D

Answer to Question 2

C

[mydiamond]

Excellent

[tkempin]

Gracias!