Exhibit 1-8 -If Society Begins by Producing 3 Units of X and of X

question 106

Multiple Choice

Exhibit 1-8
-If society begins by producing 3 units of X and 4 units of Y and then alters production so that it is now producing 4 units of X and 4 units of Y, and we know that the quantity and quality of resources were unchanged and that technology did not change, then

• A)society has moved along the production possibilities curve.
• B)the combination of 3 units of X and 4 units of Y are best represented by a point inside the production possibilities curve.
• C)the combination of 3 units of X and 4 units of Y are best represented by a point outside the production possibilities curve.
• D)resources were being fully utilized at 3 units of X and 4 units of Y.
• E)resources were being efficiently utilized at 3 units of X and 4 units of Y.

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Definitions:

Capital Structure

The mix of different forms of external funds and equity used by a firm to finance its overall operations and growth.

Debt-Equity Ratio

This metric calculates the relative use of debt and shareholders' equity in financing assets for a company.

Capital Budgeting

The process used by organizations to evaluate and prioritize investments in long-term assets and projects.

Asset Beta

A measure of the volatility, or systematic risk, of an asset or portfolio compared to the market as a whole.