Figure 113 Shows Mendork's Production Possibility Curve for the Only Two

question 82

Multiple Choice

Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.

-Refer to Figure 1.13 to answer this question.If new technology increased the output of guns by 50 percent,how many guns could be produced if 6 tonnes of butter were produced?

• A)18 guns.
• B)20 guns.
• C)15 guns.
• D)10 guns.
• E)0 guns.

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Definitions:

Forward Contract

A financial agreement to buy or sell a specific asset at a predetermined price at a set time in the future.

Fair Value Hedge

A financial strategy used to offset the risk of changes in the fair value of a recognized asset or liability or an unrecognized firm commitment.

Rupee

The official currency of India, also used in other South Asian countries but may differ in value.