If the Production Possibilities Curve Is a Downward-Sloping Straight Line

question 110

Multiple Choice

If the production possibilities curve is a downward-sloping straight line, that would indicate

• A)that society cannot decide which good it prefers
• B)an absence of scarcity
• C)constant opportunity cost
• D)inefficiency
• E)specialization

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Definitions:

Lowest Net Income

Refers to the lowest amount of net income recorded by a company over a given period, demonstrating its worst financial performance phase.

LIFO Inventory Method

Last In, First Out, an accounting method where the most recently acquired items are the first to be sold or used.

Gross Profit

The difference between revenue and the cost of goods sold, indicating how efficiently a company uses labor and supplies in production.

FIFO Method

An inventory valuation method that assumes that the first items produced or purchased are the first used or sold.