Exhibit 2-13 Production Possibilities Curve

question 63

Multiple Choice

Exhibit 2-13 Production possibilities curve
-In Exhibit 2-13, if the economy decides to locate at point E, then:

• A) this is the best choice for this economy.
• B) the maximum number of consumption goods is being produced.
• C) the economy has not achieved full employment.
• D) the economy could not survive because no food is being produced.
• E) the economy has not achieved maximum efficiency.

---

Definitions:

Fully Depreciated

An asset has reached the end of its useful accounting life, and its book value is reduced to salvage or residual value.

Plant Asset

Long-term tangible assets that are used in the operation of a business and not expected to be converted to cash in the short term.

Salvage Value

An estimation of the residual worth of an asset at the conclusion of its effectiveness.

Retired

The status of no longer being active in one's profession or job due to reaching a certain age or voluntary choice, often resulting in pension or retirement benefits.