-The Above Table Shows Production Combinations on a Country?s Production

question 70

Multiple Choice

$$\begin{array} { | l | l | l | } \hline \text { Point } & \begin{array} { l } \text { Production of } \\X\end{array} & \begin{array} { l } \text { Production of } \\Y\end{array} \\\hline \text { A } & 0 & 40 \\\hline B & 3 & 36 \\\hline \text { C } & 6 & 28 \\\hline \text { D } & 9 & 16 \\\hline \text { E } & 12 & 0 \\\hline\end{array}$$
-The above table shows production combinations on a country?s production possibilities frontier. The opportunity cost of increasing the production of Y from 16 to 28 units is units of good X per unit of good Y.

• A) 12
• B) 3
• C) 6
• D) There is no opportunity cost when moving from one point to another along a production possibilities frontier so none of the above answers is correct.

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments.

Residual Income

The net income an investment or business venture generates above the minimum rate of return.

Minimum Required Rate

The lowest return rate that an investor or project manager would accept for an investment.

Residual Income

Income that remains after all costs and expenses, including minimum required return on investment, have been subtracted.