A Movement from a Point Inside the Production Possibilities Frontier

question 26

Multiple Choice

A movement from a point inside the production possibilities frontier to a point on the production possibilities frontier represents

• A)unemployment of labour but not capital.
• B)an infinite opportunity cost.
• C)a free lunch.
• D)full employment of labour but not capital.
• E)a tradeoff.

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Definitions:

Total Costs

The sum of all expenses incurred by a business in the production of goods or services, including fixed and variable costs.

Output

The amount of goods or services produced by a company, industry, or economy within a specified period.

VC

Venture Capital, a form of private equity financing provided by investors to startups and small businesses with long-term growth potential.

AVC

Average Variable Cost, which is the total variable costs (costs that change with production levels) divided by the quantity of output produced.