Zetaland Produces Widgets and Gadgets

question 13

Multiple Choice

Zetaland produces widgets and gadgets. At current levels of output, it can produce more of both. We can conclude that

• A) Zetaland is at full employment.
• B) opportunity cost is maximized.
• C) some resources are not being used.
• D) the economy is on the production possibilities frontier.

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Definitions:

Merchandise

Goods that are bought and sold in the course of business, typically in a retail or wholesale environment.

Credit

An entry on the right side of an accounting ledger representing an increase in liabilities or income, or a decrease in assets or expenses.

Contra Accounts

Accounts used to offset or reduce the balance of another account, usually appearing on the balance sheet.

Merchandiser

A business or person that purchases goods for resale at a profit.