The Production Possibilities Curve Illustrates the Basic Principle That

question 112

Multiple Choice

The production possibilities curve illustrates the basic principle that

• A)an economy's capacity to produce increases in proportion to its population.
• B)if all resources of an economy are in use, more of one good can be produced only if less of another is produced.
• C)an economy will automatically seek that output at which all of its resources are employed.
• D)no opportunity cost exists in production.

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Definitions:

Financial Advantage

Financial advantage refers to the benefit obtained from making a financial decision that results in positive outcomes, such as cost savings or increased revenue.

Costs Associated

Expenses that are linked to a specific product, activity, or department within a business.

Special Order

An order for a product or service that is outside of the company's regular operations or production schedule, often requiring special pricing or conditions.

Excess Capacity

Refers to a situation where a company has more production capability available than is necessary to meet demand, often resulting in unused resources or facilities.