Use the Following to Answer Question

question 86

Multiple Choice

Use the following to answer question:

-(Figure: Guns and Butter) Use Figure: Guns and Butter.If the economy is operating at point B,producing 16 guns and 12 pounds of butter per period,a decision to move to point E and produce 18 pounds of butter:

• A)indicates that you can have more butter and guns simultaneously.
• B)makes it clear that this economy has decreasing opportunity costs.
• C)necessitates a loss of 8 guns per period.
• D)necessitates a loss of 4 guns per period.

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Definitions:

Expense

An expense represents a cost incurred by a business or individual in the process of generating revenue.

Depreciation

The accounting method of allocating the cost of a tangible or physical asset over its useful life, representing how much of the asset's value has been used up.

Equipment

Tangible property owned by a business that is used in its operations to generate income, having a useful life beyond one year.

Net Income

The net income of a company following the deduction of all expenses, taxes, and costs from its total revenues.