-Using Figure 1

question 13

Multiple Choice

-Using Figure 1.7 we know the production of 5 units of soda and 2 units of pizza is

• A)possible, but there would be unemployed resources.
• B)possible, but only if all resources were fully employed.
• C)impossible because we have the resources but do not have the technology.
• D)impossible because we have the technology but do not have the resources.

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Definitions:

Cash Break-Even

It refers to the point at which a business generates just enough revenue to cover its operating expenses, indicating no profit or loss.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company’s operating income to its sales, indicating how a change in sales volume will impact operating income.

Forecasting Risk

The risk that a forecast may prove to be incorrect, potentially leading to financial losses or missed opportunities in financial markets.

Cost-Cutting Proposal

A plan or suggestion aimed at reducing expenses to improve profitability.