If Good "A" Is Represented on the Horizontal Axis and Good

question 9

Multiple Choice

If good "A" is represented on the horizontal axis and good "B" on the vertical axis, then the steeper the production possibilities frontier at a given level of production of good "A," the

• A)larger the opportunity cost of producing an extra unit of good "A."
• B)larger the quantity of resources being devoted to the production of good "B."
• C)smaller the quantity of resources being devoted to the production of good "A."
• D)smaller the opportunity cost of producing an extra unit of good "A."
• E)greater the returns to scale in the production of good "A."

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Definitions:

Short-Term Credit

Loans or credit facilities intended to be repaid within a short period, typically less than one year, used for fulfilling immediate financial needs.

Daily Operations

The day-to-day activities necessary for a business to function smoothly, including production, sales, and administrative tasks.

Compensating Balance

A minimum account balance that a borrower is required to maintain with a lender as a condition for a loan, intended to compensate the bank for providing the loan or credit line.

Effective Interest Rate

The actual return on an investment or the actual cost of a loan, taking into account the compounding of interest over time, as opposed to the nominal interest rate.