Question

1. in explaining the concept of production possibilities, one of the assumptions is that there is full use of resources, knowledge, and technology. This assumption reflects the true situation of a country.

a. The first and the second statements are both true.

B. the first statement is true. The second statement is false.

c. The first and the second statements are both false.

D. the first statement is false. The second statement is true.

E. the assumption does not reflect the true situation of a country

2. on the matter of public policy, the government should analyze the economic impact of labor migration. Among the effects of miration on the economy are:

a. migration will result in a decrease in the real output of the source country

b. increased productivity in the source country

c. redistribution of income in the source country

d. all of the above

3. the best indicator of a country's economic progress is reflected in the

a. standard of living

b. educated citizens

c. peaceful environment

d. all of the items mentioned

Answer 1

1. The correct option is E. In a real situation, the resources, technology, and knowledge can never be put to full use since there are limitations to the transfer of these from place of production to where it is required.

2. The correct option is d. Due to less labour available, total output of the source country will decline, diminishing returns to labour increases labour productivity upon migration, and it also redistribute income due to shifting of resources away from the those who migrated.

3. The correct option is A. Standard of living indicates how well the citizens are doing in terms of their economic well being.