(Figure: Interpreting PPF Shifts) According to the Graph, Which of the Following

question 155

Multiple Choice

(Figure: Interpreting PPF Shifts) According to the graph, which of the following changes may cause the production possibilities frontier to shift inward from PPF₁ to PPF₀?

• A) increase in the labor force
• B) improve the skills of the workers
• C) increase government regulation on businesses overall
• D) increase in the population

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Definitions:

Invested Capital

Funds provided by investors or lenders used by a company to acquire or upgrade physical assets like buildings and machinery.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit divided by the cost of the investment.

Residual Income

The amount of income that exceeds the minimum rate of return expected on investments or capital.

Residual Income

The income that remains after all costs of capital used to generate revenues have been subtracted.