The Diagram Below Shows Two Production Possibilities Boundaries for Country

question 46

Multiple Choice

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4
-Refer to Figure 1-4.At point B,

• A)the price of capital goods is higher than the price of consumer goods.
• B)Country X is producing too many consumer goods and too few capital goods.
• C)the price of consumer goods is equal to the price of capital goods.
• D)the opportunity cost of producing an extra unit of capital goods is higher than at point A.
• E)the opportunity cost of producing an extra unit of consumer goods is higher than at point A.

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Definitions:

New Equity

The issuance of additional shares of stock by a company to investors, typically to raise capital for business expansion or operational needs.

Board of Directors

The board of directors is a group of individuals elected by shareholders to oversee the management and governance of a corporation.

Issue Dividends

The process by which a company distributes a portion of its earnings to its shareholders.

Dividend Irrelevance Theory

A theory suggesting that the dividend policy of a company is irrelevant to its market value, focusing instead on its earnings and investment policies.