Hypothetical Production Schedule for a Two-Product Economy -If the Economy Were Producing at Point C and Moves

question 236

Multiple Choice

Hypothetical Production Schedule for a Two-Product Economy $\begin{array}{ccc}&Units~ of&Units~ of\\\text { Points } & \text { Consumer Goods } & \text { Capital Goods } \\\hline \text { A } & 0 & 20 \\\text { B } & 40 & 16 \\\text { C } & 72 & 12 \\\text { D } & 96 & 8 \\\text { E } & 112 & 4 \\\text { F } & 120 & 0\end{array}$
-If the economy were producing at point C and moves to point B

• A)4 units of capital goods are gained,while the capacity to produce 32 consumer goods are lost.
• B)16 units of capital goods are gained at an opportunity cost of producing 40 consumer goods.
• C)16 units of capital goods are gained at an opportunity cost of producing 72 consumer goods.
• D)4 units of capital goods are gained,while the capacity to produce 72 consumer goods are lost.

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Definitions:

Maturity

The date on which the principal amount of a financial instrument such as a bond or loan is due to be paid in full.

Forest Industry

The sector involved in the management, conservation, harvesting, processing, and sales of forests and forestry products.

Decline

A decrease in the value or price of an asset or a reduction in the strength or quality of something.

Strip Bond

A financial instrument representing a portion of a debt security without periodic interest payments, where the investor receives the face value at maturity.