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In the Accompanying Diagrams, Solid Lines Are Production Possibilities Curves

Question 33

Multiple Choice

  In the accompanying diagrams, solid lines are production possibilities curves, and the dashed lines are trading possibilities curves. The trading possibilities curves suggest that the terms of trade are A)  1.5 beers for 1 pizza. B)  1 beer for 2 pizzas. C)  2 beers for 1 pizza. D)  1 beer for 1.5 pizzas. In the accompanying diagrams, solid lines are production possibilities curves, and the dashed lines are trading possibilities curves. The trading possibilities curves suggest that the terms of trade are


A) 1.5 beers for 1 pizza.
B) 1 beer for 2 pizzas.
C) 2 beers for 1 pizza.
D) 1 beer for 1.5 pizzas.

Correct Answer:

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