As We Increase the Production of X, We Find We

question 100

Multiple Choice

As we increase the production of X, we find we must give up larger and larger amounts of Y per unit of X. Select the best statement.

• A)This illustrates increasing opportunity cost.
• B)As a result, we should not specialize in the production of X.
• C)The production possibilities frontier for X and Y is a straight line.
• D)Good Y will be more highly regarded by consumers than good X.
• E)We must be producing inside the production possibilities frontier.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), representing the fraction of income or expenditure used to pay taxes.

Taxable Income

The amount of income used to calculate how much the taxpayer owes in taxes to the government.

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), reflecting the percentage of income paid in taxes.

Taxable Income

The amount of income that is used to calculate an individual's or a company's income tax due to the government.