Suppose a society begins by producing 3 units of X and 4 units of Y and then alters production to 4 units of X and 4 units of Y. If the quantity and quality of resources and the technology being used remain unchanged, then:
a. 3 units of X and 4 units of Y are a combination best represented by a point inside the production possibilities curve PPC.
b. we can conclude that the society has moved along the PPC.
c. we can conclude that resources were being fully utilized at 3 units of X and 4 units of Y.
d. we can conclude that resources were being efficiently utilized at 3 units of X and 4 units of Y.
e. 3 units of X and 4 units of Y are a combination best represented by a point outside the PPC.
Question 2
Ted has decided to buy a burger and fries at a restaurant, but is considering whether to buy a drink as well. If the price of a burger is 2, fries are 1, drinks are 1, but a value meal with all three costs 3.80, the marginal cost to Ted of the drink is:
a. 0.20
b. 0.80
c. 1.00
d. 3.80
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