A Computer Company Leases Rather Than Sells Its Computers to Consumers

question 20

Multiple Choice

A computer company leases rather than sells its computers to consumers for a monthly fee. The company maintains the computers and replaces them as needed. The old computers are either refurbished or recycled. What does this business model represent?

• A) cradle-to-cradle management
• B) a closed-loop system
• C) green business
• D) a service-oriented economy
• E) all of the above

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Definitions:

Production Possibilities Curve

A graphical representation that shows the maximum quantity of one good that can be produced for every possible quantity of another good produced, given the available resources and technology.

Consumer Goods

Products and services that are purchased for personal use or consumption by the general public.

Capital Goods

Goods that are used in producing other goods and services rather than being bought by consumers.

Opportunity Cost

The cost of forgoing the next best alternative when a decision is made to choose one option over another.