While Producing on the Production Possibilities Frontier, If Additional Units

question 132

Multiple Choice

While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be

• A) a straight line.
• B) positively sloped.
• C) bowed outward.
• D) bowed inward.

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Definitions:

Equivalent Units

A technique in cost accounting used to allocate costs to partially completed goods, expressed in terms of fully completed units.

FIFO Method

Another term for FIFO, emphasizing its role as an accounting method where the oldest inventory items are recorded as sold first.

Equivalent Unit

A concept in cost accounting used to allocate costs to partially completed goods, converting them into the amount of finished goods units that could have been produced with the same amount of input.

Cost Assignment

The process of identifying and allocating costs to cost objects, such as products, services, or departments.