A Point on the Frontier of the Production Possibilities Curve

question 28

Multiple Choice

A point on the frontier of the production possibilities curve is:

• A)attainable and the economy is efficient.
• B)attainable, but the economy is inefficient.
• C)unattainable, but the economy is inefficient.
• D)unattainable and the economy is efficient.

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Definitions:

Expected Profit

The anticipated return on an investment or business venture after considering all relevant costs and revenues.

Optimal R&D

The most efficient level of investment in research and development activities that maximizes the benefits from new knowledge and products.

Expected Rate Of Return

The estimated gain or loss of an investment over a given period, expressed as a percentage.

Interest-Rate Cost-Of-Funds

The cost to borrowers or the rate paid to savers and investors based on the interest rates in the financial markets or the rate of return required on investment funds.