A Production Possibilities Frontier Is a Line or Curve That

question 43

Multiple Choice

A production possibilities frontier is a line or curve that:

• A) shows all the possible combinations of outputs that can be produced using all available resources.
• B) shows what can be produced when all available resources are efficiently used.
• C) shows the best combinations of outputs that can be produced using all available resources.
• D) explains why societies make the choices they do.

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Definitions:

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can be used to cover fixed costs and contribute to profit.

Operating Costs

Expenses associated with the operation of a business, including costs of goods sold and administrative expenses.

Annual Cash Inflows

The total amount of money, often from sales, investments, or financing, that flows into a company over a year.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument, in order to determine its present value.