While Producing on the Production Possibilities Frontier, If Additional Units

question 197

Multiple Choice

While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be

• A) bowed outward.
• B) bowed inward.
• C) positively sloped.
• D) a straight line.

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold on the open market.

Retained Earnings

The cumulative amount of net income kept within a company after dividends are paid, reinvested in the business or used to pay off debt.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operating costs, from its total revenues, indicating the company’s profit.