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.

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Definitions:

Services

Economic activities that are intangible, are not stored, and do not result in ownership transfer from the service provider to the service receiver.

Double-Entry

An accounting principle where every transaction is entered twice, as a debit in one account and a credit in another, to keep the accounting equation balanced.

Accounting Equation

The fundamental principle of accounting that represents the relationship between assets, liabilities, and owner's equity: Assets = Liabilities + Owner's Equity.

Journal Entry

A record in the books of accounts that represents a business transaction, including information like date, accounts affected, and amounts.