If the Production Possibilities Frontier Between Bottled Water and Water

question 163

Multiple Choice

If the production possibilities frontier between bottled water and water in a jug is a straight line,which of the following statements would be correct?

• A) A large amount of unemployment must exist.
• B) Resources are equally productive at producing either product.
• C) There is no tradeoff between the two goods.
• D) There is no decrease in the production of one good when the production of the other is increased.
• E) Producing more of one good gives the economy a free lunch.

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Definitions:

Profitability Ratios

Financial ratios that are used to measure the ability of a company to turn sales into profits and to earn profits on assets and owner’s equity committed.

Primary Financial Records

Essential documents that record and detail the financial activities and condition of a business or individual, such as income statements, balance sheets, and cash flow statements.

Benchmarking

The process of comparing one's business processes and performance metrics to industry bests or best practices from other industries.

Financial Ratios

Quantitative measures derived from financial statements used to evaluate a company's financial performance and condition.