A Point Lying Inside the Production Possibilities Boundary Is One

question 23

Multiple Choice

A point lying inside the production possibilities boundary is one at which

• A)more output could be produced with existing resources.
• B)it is not possible to produce more output with existing resources.
• C)the economy has run out of resources.
• D)there is no scarcity.
• E)the opportunity cost of producing more output is negative.

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Definitions:

Executory Costs

Executory costs are the ongoing operating expenses in a lease agreement, such as insurance, maintenance, and property taxes, usually borne by the lessee.

Capital Lease

A lease treated as an acquisition of an asset and the incurrence of an obligation on the lessee's balance sheet, indicating a purchase and financing arrangement.

Lease Liability

An obligation representing the present value of future lease payments under a non-cancellable lease.

Operating Lease

A lease agreement that allows for the use of an asset but does not transfer ownership of the asset to the lessee, often with shorter terms.