The Production Possibilities Curve Illustrates the Basic Principle That

question 59

Multiple Choice

The production possibilities curve illustrates the basic principle that

• A) an economy's capacity to produce is unrelated to its population.
• B) if all the resources of an economy are being used efficiently, more of one good can be produced only if more of another good is produced.
• C) an economy will automatically move toward a point at which all of its resources are being used inefficiently.
• D) if all the resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.

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Definitions:

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of income. This usually occurs with corporate income taxed at both the corporate level and again at the shareholder level on dividends.

Disadvantage

A condition or situation that makes it more difficult for someone or something to succeed or achieve a desired outcome.

Income Taxes

Taxes levied by governments on the income earned by individuals and entities within their jurisdiction.

No-Par Common Stock

A type of common stock that is issued without a par value, meaning its value is not fixed in the corporate charter.