Which of the Following Best Illustrates Inefficiency

question 99

Multiple Choice

Which of the following best illustrates inefficiency?

• A) producing outside the production possibilities curve
• B) limiting economic growth by reducing capital spending
• C) high levels of unemployment of labour and other resources
• D) forgoing civilian goods in order to produce more military goods

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Definitions:

Unit Sales

The measure of the quantity of individual items sold by a company, as opposed to total revenue.

Break-Even

The point at which total costs and total revenues are equal, resulting in no net gain or loss.

Fixed Expense

Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance premiums.

Variable Expense

Expenses that vary directly with changes in production volume or business activity levels.