Which of the Following Is an Example of Productive Inefficiency

question 44

Multiple Choice

Which of the following is an example of productive inefficiency?

• A) Scientists discover a new substance that dramatically increases potential steel production.
• B) A demographic boom leads to a rise in the number of workers in the labor force.
• C) The rate of unemployment falls to zero.
• D) Computer technicians are forced to answer telephones rather than perform their normal duties.
• E) Due to economic growth,the economy reaches a new point along its production possibilities frontier.

Understanding how share transactions (buyback, retirement, treasury shares) affect a company's financial statements.

Ability to analyze the implications of financial decisions on a company's leverage and stock performance.

Grasping the basics of financial statement analysis related to share and dividend transactions.

Understanding the concept of financial leverage achieved through preference shares.

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Definitions:

Excess Equipment

Unused or surplus machinery and tools that exceed the current production needs of a company.

Sales Increase

A rise in the volume or value of products or services sold by a business over a specific period.

Resource Imbalance

A situation where the allocation of resources does not match the needs or demands, leading to inefficiencies or operational challenges.

Lead Indicator

A predictive measure that indicates future trends or outcomes before they visibly manifest, enabling preemptive actions or decisions.