Which of the Following Is True of the Production Possibilities

question 122

Multiple Choice

Which of the following is true of the production possibilities curve?

• A) It assumes a fixed level of technology.
• B) It assumes that the prices of the products considered are equal.
• C) It assumes some inefficiency will result in the use of resources.
• D) All of the above are correct.

---

Definitions:

Gross Margin Ratio

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, illustrating how effectively a company uses labor and supplies in production.

Gross Profit

The difference between revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.

Gross Margin

The difference between sales revenue and the cost of goods sold, representing the financial health of a company’s core activities.

Net Sales

The amount of revenue generated from goods or services sold after deducting returns, allowances, and discounts.