Hypothetical Production Schedule for a Two-Product Economy -If the Economy Could Produce 42 Consumer Goods and 12

question 191

Short Answer

Hypothetical Production Schedule for a Two-Product Economy $\begin{array}{ccc}&Units~ of&Units~ of\\\text { Points } & \text { Consumer Goods } & \text { Capital Goods } \\\hline \mathrm{A} & 0 & 30 \\\mathrm{B} & 15 & 24 \\\mathrm{C} & 27 & 18 \\\mathrm{D} & 36 & 12 \\\mathrm{E} & 42 & 6 \\\mathrm{F} & 45 & 0\end{array}$
-If the economy could produce 42 consumer goods and 12 capital goods,given the current production possibilities curve,the economy would be producing ___________________ (outside/on/inside)the curve.

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Definitions:

Capital Gain

The profit earned from the sale of assets like stocks, bonds, or real estate, which exceeds the purchase price.

Book Value

For a company, the value of equity, equal to total assets minus total liabilities. Book value can be stated in total or per share. For an asset, book value is the net of original cost minus accumulated depreciation, and is generally referred to as net book value.

Original Cost

The initial monetary value of an asset or investment at the time of its acquisition.

Marginal Tax Rate

The rate at which the next dollar of income will be taxed. Generally the taxpayer’s bracket rate.