Table 2.1.1 The Following Table Gives Points on the Production Possibilities Frontier

question 145

Multiple Choice

Table 2.1.1
The following table gives points on the production possibilities frontier for goods X and Y.

-Refer to Table 2.1.1. As we increase the production of X,

• A)the amount of Y that is given up for each additional unit of X decreases.
• B)the output of Y increases.
• C)the opportunity cost of each additional unit of X increases.
• D)unemployment increases.
• E)the amount of X increases at an increasing rate.

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Credit Extension

The act of lending additional credit to borrowers or the period for which the credit is extended.

Receivables Financing

A form of financing where a company uses its accounts receivable as collateral to obtain a loan or advance, improving cash flow.

Variable Cost Per Unit

The cost that varies with the level of output or production, such as materials and labor, calculated on a per unit basis.