Which of the Following Is NOT True Regarding the Production

question 109

Multiple Choice

Which of the following is NOT true regarding the production possibilities frontier (PPF) ?

• A) The PPF shows the combination of goods that a country can produce given its current productivity and supply of resources.
• B) The PPF illustrates the trade-offs that exist in the production of goods.
• C) The PPF shows us that gains from trade are maximized when countries produce goods for which they have an absolute advantage in production.
• D) The PPF illustrates the fundamental ideas of scarcity and opportunity cost.

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Definitions:

Capital Flow

The movement of money for the purpose of investment, trade, or business production, either within a country or internationally.

Tax Shifting

The transfer of the burden of a tax from the entity legally responsible for paying it to another party, often consumers, through higher prices.

Tax Evasion

The illegal practice of not paying taxes by not reporting income, reporting expenses not legally allowed, or by not paying taxes owed.

Corporate Profits Tax

A tax imposed on the income or profit earned by corporations.