Use the Following to Answer Questions

question 250

Multiple Choice

Use the following to answer questions :
Figure: Production Possibility Frontier Curve for Tealand
-(Figure: Production Possibility Frontier for Tealand) Look at the figure Production Possibility Frontier for Tealand. Tealand can produce at point E only if the government:

• A)eliminates unemployment.
• B)raises taxes.
• C)permits more immigration.
• D)increases the cost of production by decreasing the use of technology.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or business activity.

Quantity of Output

The total amount of goods or services produced by a company, sector, or economy within a specified period.

Costs

The expenditure incurred by a business in the process of producing or providing goods or services.

Variable Costs

Expenses that change in proportion to the activity of a business, such as materials and labor costs.