In Terms of the Production Possibilities Curve,inefficiency Is Represented by

question 144

Multiple Choice

In terms of the production possibilities curve,inefficiency is represented by

• A)All points on the curve.
• B)All points outside the curve.
• C)All points inside the curve.
• D)A rightward shift of the curve.

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Definitions:

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements, often estimated using the Capital Asset Pricing Model (CAPM).

Pre-Tax Cost of Debt

The rate of return that a company pays on its debt, before taking into account tax deductions.

Face Value

The nominal value printed on a bond or security which indicates its worth at maturity but does not necessarily reflect its market value.

Weighted Average Cost of Capital (WACC)

The average rate of return a company is expected to pay its shareholders and debt holders, weighted according to the proportion of equity and debt in the company's capital structure.