The Diagram Below Shows Two Production Possibilities Boundaries for Country

question 135

Multiple Choice

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4 Refer to Figure 1-4.A shift of the production possibilities boundary from PPB₁ to PPB₂ implies

• A)a movement from full employment to some unemployment.
• B)that if point E is the new choice of outputs,productivity has increased in the consumer goods industry.
• C)that productive capacity in the capital goods industries has improved.
• D)an inevitable decrease in total output.
• E)that productive capacity in the consumer goods industry has improved.

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Definitions:

Factory Overhead

The indirect costs associated with manufacturing, including expenses like utilities and maintenance not directly tied to the production of goods.

Predetermined Factory Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a standard cost system.

Estimated Total Factory Overhead Costs

The projected total of all indirect expenses related to the production process, including indirect labor, materials, and other overhead costs.

Estimated Activity Base

A projected measure of activity, such as labor hours or machine hours, used for allocating overhead costs in budgeting and costing.