Greta Starts Using a New Baking Technique,and She Can Now

question 42

Multiple Choice

Greta starts using a new baking technique,and she can now do twice as much of everything.In a single day,Greta can now make 10 cakes or 8 pies,rather than the 5 cakes and 4 pies she could previously bake.Greta's production possibility frontier has _____,and her opportunity cost of making pies _____.

• A)shifted right;is unchanged
• B)shifted right;has decreased
• C)not changed;has increased
• D)not changed;has decreased

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Definitions:

Net 50

A payment term that indicates an invoice must be paid in full within 50 days.

Lock Box System

A service offered by banks to process payments received by a company directly into its bank account, speeding up the collection and utilization of funds.

Check Clearing

The process of transferring funds from the check writer's account to the recipient's account, finalizing the payment.

Compensating Balance

A minimum account balance that a borrower is required to maintain as a condition for obtaining a loan, it compensates the bank by offsetting the cost of providing the loan.