-In the Above Figure, What Is the Efficient Quantity of Hot

question 444

Multiple Choice

-In the above figure, what is the efficient quantity of hot dogs to produce?

• A) 2 thousand per day
• B) 4 thousand per day
• C) 6 thousand per day
• D) The efficient quantity cannot be determined without knowing the PPF for this economy.

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Definitions:

Financial Forecast

A prediction of future revenues, expenses, and profits for a specific period.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash within a year.

Default Risk

The risk that a borrower will not pay the interest and/or principal on a loan as it becomes due. If the issuer defaults, investors receive less than the promised return on the bond. Default risk is influenced by both the financial strength of the issuer and the terms of the bond contract, especially whether collateral has been pledged.

Interest Rate Risk

Arises from the fact that bond prices decline when interest rates rise. Under these circumstances, selling a bond prior to maturity will result in a capital loss; the longer the term to maturity, the larger the loss.