Exhibit 2-16 Production Possibilities Curve in Exhibit 2-16, to Move

question 88

Multiple Choice

Exhibit 2-16 Production possibilities curve In Exhibit 2-16, to move from U to B, the opportunity cost:

• A)would be 4 units of consumption goods.
• B)would be 2 units of capital goods.
• C)would be zero.
• D)would be 5 units of capital goods.
• E)cannot be estimated.

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Definitions:

Equity Capital

Funds raised by a company through the sale of shares in return for ownership interest, without obligation to repay the investment.

Issuing Bonds

The act of a corporation or government raising capital by borrowing from investors through the sale of bond securities.

Reinvesting Earnings

The practice of using a company's profits to invest back into the business to fund growth, expansion, or improvements rather than distributing it to shareholders as dividends.

Strategic Plan

A document that outlines an organization's long-term goals and the strategies it will use to achieve them.