If an Economy Is Operating on Its Production Possibility Frontier,which

question 137

Multiple Choice

If an economy is operating on its production possibility frontier,which of the following statements is true?

• A)Products are produced using inefficient production technology.
• B)The capacity utilization rate is less than full production.
• C)The economy's labor force is fully employed.
• D)A fall in the price of an input will enable the economy to produce outside the production possibility frontier.

---

Definitions:

Average Tax Rate

The ratio of the sum of taxes paid to the overall income, determined by dividing the total taxes paid by the total income.

Total Income

The sum of all earnings and revenues received by an individual or business, including wages, salaries, investment income, and revenue from sales or services.

Total Taxes

The aggregate amount of taxes paid by an individual, corporation, or other entity to governmental authorities within a specified period.

Payroll Tax

Taxes imposed on employers and/or employees, usually calculated as a percentage of the salaries that employers pay their staff.