Refer to the Diagrams Below

question 30

Multiple Choice

Refer to the diagrams below. The solid lines are production possibilities curves; the dashed lines are trading possibilities curves. The trading possibilities curves suggest that the terms of trade are:

• A) 1.5 beers for 1 pizza.
• B) 1 beer for 2 pizzas.
• C) 2 beers for 1 pizza.
• D) 1 beer for 1.5 pizzas.

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Definitions:

Return on Investment

A financial ratio that calculates the gain or loss generated on an investment relative to the amount of money invested.

Investment Turnover

A financial ratio that measures the efficiency of a company's use of its investments in generating sales revenue.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit divided by the cost of the investment.

Profit Margin

The ratio of net income to revenue, indicating how much profit is made on average from sales.