The Diagram Below Shows Two Production Possibilities Boundaries for Country

question 104

Multiple Choice

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4 Refer to Figure 1-4.If Country X,constrained by the production possibilities boundary PPB₁,is currently producing at point A,it can produce more capital goods by moving to point

• A)F.
• B)E.
• C)D.
• D)C.
• E)B.

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Definitions:

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.

Competitive Industry

An industry in which numerous producers supply a homogeneous product or service, leading to competition over price and quality.

Marginal Cost

The extra expenditure needed to manufacture one more unit of a good or service.

Average Cost

The total cost of production divided by the quantity of output produced; it's a measure of how much it costs, on average, to produce one unit of output.