An Outward Shift of the Production Possibilities Frontier

question 83

Multiple Choice

An outward shift of the production possibilities frontier

• A)reflects economic stability
• B)reflects economic growth
• C)reflects economic decline
• D)does not relate to the state of the economy
• E)is always a parallel shift

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Definitions:

Labour Rate Variance

The difference between the actual wage rate paid to workers and the expected (or standard) wage rate, multiplied by the actual hours worked.

Direct Labour Costs

Costs that can be directly attributed to the production of goods or services, such as wages for workers manufacturing a product.

Variable Overhead Spending Variance

The difference between the actual variable overhead costs incurred and the expected costs based on a predetermined standard.

Variable Manufacturing Overhead Cost Incurred

The variable expenses directly related to the manufacturing process, such as materials and labor, that change with production levels.