A Country Operating Outside of the Production Possibilities Frontier Is

question 344

Multiple Choice

A country operating outside of the production possibilities frontier is operating

• A) efficiently.
• B) inefficiently and at an unattainable level.
• C) inefficiently but in an area that can be attained with proper use of resources.
• D) impossibly because a country cannot operate outside the production possibilities frontier.

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Definitions:

Tax Revenues

The income that is gained by governments through taxation.

Marginal Tax Rates

The rate of tax that applies to the next dollar of taxable income above a pre-determined threshold.

Excise Tax

A tax levied on specific goods, services, and activities, often included in the price of products like gasoline, tobacco, and alcohol.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied by producers.