The Diagram Below Shows Two Production Possibilities Boundaries for Country

question 103

Multiple Choice

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 3
-Refer to Figure 1- 3. Suppose that Country X is currently producing at point E. Country X could achieve production at point D if

• A) firms reduced output of capital goods.
• B) sufficient improvements in technology occurred in either the capital goods industry or the consumer goods industries.
• C) the given resources were more efficiently employed.
• D) the given resources were fully employed.
• E) the prices of capital goods and consumption goods fell.

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Definitions:

Credit Terms

The conditions under which credit is extended by a lender to a borrower, including repayment timing, interest rate, and other stipulations.

Carrying Cost

The total cost of holding inventory, including storage, insurance, and taxes.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that vary directly with the level of production or sales volume.