Which of the following basic economic concepts most clearly provides the foundation for the long-run aggregate supply curve?
A) the law of demand
B) the production possibilities curve
C) the law of comparative advantage
D) the law of diminishing marginal utility

Question

Quizplus · Accepted Answer

The production possibilities curve depicts the maximum output that can be produced with given resources and technology. The long-run aggregate supply curve similarly shows the potential output over time with full utilization of all resources and technology. Therefore, the production possibilities curve provides the foundation for the long-run aggregate supply curve.

Which of the Following Basic Economic Concepts Most Clearly Provides