Suppose a Production Possibilities Frontier (PPF)has Been Plotted on a Graph.If

question 22

Multiple Choice

Suppose a production possibilities frontier (PPF) has been plotted on a graph.If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods,then a point inside the PPF represents:

• A)a larger quantity of capital goods than that represented by a point along the PPF.
• B)an inefficient output combination of the two goods in the economy.
• C)an unattainable output combination of the two goods in the economy.
• D)an output combination of more consumer goods than capital goods.
• E)a larger quantity of consumer goods than that represented by a point along the PPF.

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Definitions:

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (asset, liabilities, and equity) in a balance sheet is represented as a proportion of the total account.

Operating Income

Earnings before interest and taxes (EBIT), representing the profits from a company's regular business operations excluding deductions of interest and taxes.

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Unearned Revenue

Income received by a company for services or products yet to be delivered or provided, often considered a liability until the service or product is delivered.