Scarcity Is Represented on a Production Possibilities Frontier Figure by

question 221

Multiple Choice

Scarcity is represented on a production possibilities frontier figure by

• A) technological progress.
• B) the fact that there are only two goods in the diagram.
• C) the fact there are attainable and unattainable points.
• D) the amount of the good on the horizontal axis forgone.

---

Definitions:

Discount Factor

A multiplier for future cash flows to convert them into present value, reflecting the time value of money.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating how much revenue is contributing to fixed costs and profit.

Incremental Annual Net Cash Inflows

The additional cash that flows into a business on an annual basis as a result of a specific action or investment.

Investment Project

A project or activity requiring capital expenditure with the expectation of achieving future profits or benefits.