When an Economy's Resources Are Not Fully Employed, Then It

question 71

Multiple Choice

When an economy's resources are not fully employed, then it must be true that the:

• A) production point is located outside and to the right of the production possibilities curve.
• B) production point is located along the production possibilities curve.
• C) production point is located inside and to the left of the production possibilities curve.
• D) production possibilities curve shifts to the right.
• E) production possibilities curve shifts to the left.

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Definitions:

Contribution Margin

The contribution margin is the revenue from a product or service minus the variable cost, indicating how much contributes to covering fixed costs and generating profit.

Net Income

A company's overall income following the subtraction of all costs, taxes, and expenses from its gross revenue.

Unit Sales Price

The amount charged to customers for a single unit of a product or service.

Fixed Costs

Costs that do not vary with the level of production or sales, including rent, salaries, and insurance premiums.