Consider a Production Possibilities Boundary Showing the Possible Combinations of Military

question 38

Multiple Choice

Consider a production possibilities boundary showing the possible combinations of military goods and civilian goods that a country can produce. Suppose that the country is currently at a point on the boundary. If the production of military goods is increased, the production of civilian goods will necessarily

• A)remain the same.
• B)decrease.
• C)increase.
• D)increase at a decreasing rate.
• E)increase at a increasing rate.

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Definitions:

Profit-Making Businesses

Enterprises or organizations that operate with the primary goal of earning financial profits.

Budgetary Slack

Excess resources set within a budget to provide for uncertain events.

Operational Plans

Detailed plans that outline how a strategy will be implemented in terms of day-to-day operations.

Flexible Budget

A budget that shows the expected results of a responsibility center for several activity levels.