A Production Possibilities Curve Will Shift Inward

question 235

Multiple Choice

A production possibilities curve will shift inward

• A) when the unemployment rate increases.
• B) when production is inefficient.
• C) when resources are expanding.
• D) when a war destroys the capital goods of a country.

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Definitions:

Variable Expense Per Unit

The cost that varies with each unit produced or sold, affecting the company's total variable expenses directly.

Total Contribution Margin

The difference between total sales revenue and total variable costs, indicating how much revenue is available to cover fixed costs and generate profit.

Contribution Format

An income statement format that differentiates between fixed and variable costs, highlighting the contribution margin.

Net Operating Income

The profit derived from a company's operations after subtracting all operating expenses, excluding taxes and interest.