Which of the following statements is true?

a

The production possibilities model is an economic model that shows different combinations of two goods that society can efficiently produce using all of its (currently) available resources and technology.

b

All along the production possibilities frontier (PPF) there is an efficient use of all (currently) available resources and technology in the economy.

c

At any point on the PPF the economy is productively inefficient.

d

All of the above.

e

Only a) and b)

Question 9(1 point)

Which of the following statements is true?

a

A model should be as complex as possible to accomplish its purpose (to explain or predict an economic phenomenon, such as inflation or unemployment, for instance).

b

To make an economic model, we make two types of assumptions: simplifying assumptions, and critical assumptions.

c

A critical assumption is any assumption that makes a model simpler without affecting any of its important conclusions.

d

All of the above.

e

Only a) and b)

Question 10(1 point)

Which of the following statements is true?

a

Purchasing power is the ability to buy goods and services.

b

While goods are tangible (say, apples and laptops), services are intangible (say, haircuts and lawn mowing).

c

Income is the amount of money one makes a year.

d

All of the above.

e

Only a) and b)