If the Production Possibilities Curve Is a Straight Line

question 164

Multiple Choice

If the production possibilities curve is a straight line,

• A) the two goods will sell at the same market prices.
• B) economic resources are perfectly substitutable between the production of the two goods.
• C) the two goods are equally important to consumers.
• D) equal quantities of the two goods will be produced at each possible point on the curve.

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Definitions:

ROI

Return on Investment is a performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.

Residual Income

The amount of income that an entity has after all personal debts and expenses, including a mortgage, have been paid.

Residual Income

A measure of profitability that calculates the net income an investment or division generates above a specified minimum return.

West Division

The West Division can refer to a specific geographical or organizational subsection of a company or sports league, typically located in the western part of a country or region.