The Opportunity Cost of a Good on the Y-Axis of a Production

question 111

Multiple Choice

The opportunity cost of a good on the y-axis of a production possibilities frontier is the _____ of the production possibility frontier.

• A) x-intercept
• B) y-intercept
• C) slope
• D) inverse of the slope

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Definitions:

Par Value

The face value of a bond or stock, representing the amount to be returned to the holder at maturity; it may not necessarily reflect the market value.

Call Premium

The extra amount over the bond's face value that investors must pay to call away a bond before its maturity date.

Term Structure

The connection between different terms or maturities and interest rates or bond yields.

Fisher Formula

An equation used to identify the nominal interest rate or the required rate of return on an investment, taking inflation into account to determine the real interest rate.