A bowed outward production possibilities frontier occurs when ...

[Ebrown]

A bowed outward production possibilities frontier occurs when
 
  A) opportunity costs are constant.
  B) resources are not scarce.
  C) as more of a good is produced, producing additional units of it require greater reductions in the other good.
  D) the society is operating on the production possibilities frontier.

Question 2

The above figure shows the U.S. market for 1 carat diamonds. With free trade, the United States produces ________ diamonds and imports ________ diamonds.
 
  A) 300,000; 600,000
  B) 0; 900,000
  C) 100,000; 900,000
  D) 100,000; 800,000
  E) 500,000; 400,000

[b614102004]

Answer to Question 1

C

Answer to Question 2

D