The Following Figure Shows the Production Possibilities Frontier for Good

question 62

Multiple Choice

The following figure shows the production possibilities frontier for Good A and Good B.In the figure below,point f represents:

• A)an efficient combination of Good A and Good B.
• B)the only efficient combination of Good A and Good B.
• C)the combination of Good A and Good B that the economy will produce.
• D)an inefficient combination of Good A and Good B.
• E)the only inefficient combination of Good A and Good B.

---

Definitions:

Plane Operating Costs

The expenses associated with operating an aircraft, including fuel, maintenance, crew, and landing fees.

Variable Cost

A cost that changes in proportion with the level of output or activity.

Fixed Cost

Expenses that do not change with the level of output or sales, remaining constant even if the business activity varies.

Activity Variance

The difference between what was expected in terms of expenses or revenues for a particular activity level and what was actually realized.