Question

1. Where can an economy not produce?

a. Inside its production possibilities frontier

b. On its production possibilities frontier.

c. Outside its production possibilities frontier.

d. At the endpoints of its production possibilities frontier.

 

2. When an economy is operating at a point on its production possibilities frontier, then

a. Consumers are content with the mix of goods and services that are being produced.

b. There is no way to produce more of one good without producing less of the other.

c. Equal amounts of the two goods are being produced.

d. All of the above are correct.