Given an Initial Endowment of Factor Inputs

question 26

Multiple Choice

Given an initial endowment of factor inputs,

• A)there is only one efficient level of outputs.
• B)there are many efficient output levels for the firms.
• C)a production possibility curve can be determined without knowing the contract curve.
• D)the midpoint on the production contract curve is the most equitable point.

---

Definitions:

Frequency of Compounding

The number of times interest is added to the principal balance of an investment or loan per time period, affecting the total interest earned or paid.

Future Value

The value of a current asset at a specified date in the future based on an assumed rate of growth.

Compounded Annually

A method of calculating interest in which the interest is added to the principal at the end of each year, then new interest is calculated on the total for the next period.

Present Value

The now-value of a prospective sum of money or cash flow sequence, according to a certain rate of return.