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The Absolute Value of the Slope of the Production Possibility

question 115

Essay

The absolute value of the slope of the production possibility frontier at any point:
A.gives the price of the good on the vertical axis that must be given up to attain an additional unit of the good on the horizontal axis.
B.is found by dividing the horizontal change by a vertical change.
C.gives on the vertical axis the quantity of the good that must be given up to produce an additional unit of the good on the horizontal axis.
D.gives on the horizontal axis the price of the good relative to the price of the good on the vertical axis.


Definitions:

ROA

Return on Assets, a financial ratio indicating the profitability of a company relative to its total assets, measuring how effectively the company is using its assets to generate earnings.

Debt-Equity Ratio

The indicator displaying the equivalent contribution of equity and debt to a company's asset base financing.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits without needing to increase financial leverage.

Debt-Equity Ratio

An indicator of a firm's use of financial debt, found by dividing the total amount of liabilities by the equity owned by stockholders.

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