Consider a PPF with Consumption Goods on the Horizontal Axis

question 12

Multiple Choice

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its ________ axis,this country ________.

• A) vertical; will experience greater economic growth
• B) vertical; will not face opportunity costs
• C) horizontal; will have a larger chance at economic growth
• D) horizontal; faces larger trade offs
• E) vertical; is operating at an inefficient point

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Definitions:

Total Variable Cost

The total of all costs that vary with output level, including materials, labor, and other expenses that increase as production increases.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own use, rather than earning income from these resources elsewhere.

Explicit Costs

Direct, out-of-pocket payments for inputs or resources employed in the production of goods or services.

Total Cost

The aggregate amount of expenses incurred by a business in producing goods or services, including both fixed and variable costs.