A Point Inside a Production Possibilities Frontier

question 145

Multiple Choice

A point inside a production possibilities frontier

• A)is unattainable.
• B)indicates a point of production efficiency.
• C)is preferred to a point on the production possibilities frontier.
• D)indicates some wasted or misallocated resources.
• E)illustrates the idea of opportunity cost.

---

Definitions:

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting the loss of value over time.

Fair Market Value

The price at which an asset would sell in the marketplace, assuming both buyer and seller are knowledgeable, willing, and under no pressure to buy or sell.

Trade-In Allowance

The amount credited to a buyer for trading in an old item towards the purchase of a new item, reducing the price of the new purchase.

Land Improvements

Enhancements to a plot of land such as landscaping, lighting, and paving, that are intended to make the land more usable and increase its value.