The Diagram Below Shows Two Production Possibilities Boundaries for Country

question 46

Multiple Choice

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4
-Refer to Figure 1-4.At point B,

• A)the price of capital goods is higher than the price of consumer goods.
• B)Country X is producing too many consumer goods and too few capital goods.
• C)the price of consumer goods is equal to the price of capital goods.
• D)the opportunity cost of producing an extra unit of capital goods is higher than at point A.
• E)the opportunity cost of producing an extra unit of consumer goods is higher than at point A.

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Definitions:

Bottlenecks

Points of congestion in a system where the actual or potential capacity is less than the demand, leading to delays or slowdowns.

Target Costing

A pricing strategy where the selling price of a product is determined first, and then the manufacturing cost is managed to ensure profitability.

Market Share

The portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in that market.

Manufacturing Costs

Expenses incurred in the process of producing goods, including raw materials, labor, and overhead costs.