Suppose a Nation Is Currently Producing at a Point Inside

question 121

Multiple Choice

Suppose a nation is currently producing at a point inside its production possibilities frontier. What do we know?

• A) The nation is producing beyond its capacity, and inflation will occur.
• B) The nation is not using all available resources and is inefficient.
• C) The nation needs improved technology in order to produce an efficient combination of goods.
• D) There will be a large opportunity cost if the nation tries to increase production.

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Definitions:

Incorporation

The process of legally declaring a business as a corporation, allowing it to operate as a separate legal entity from its owners.

Sole Proprietorship

An individual carrying on business alone.

Partnership

When the ownership and responsibilities of a business are shared by two or more people with a view toward profit.

Incorporation Process

The series of legal steps taken to form a legally recognized company or corporation.