The Production Possibilities Curve Below Shows the Hypothetical Relationship Between

question 230

Multiple Choice

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the above table.What is the opportunity cost of producing the fourth unit of capital goods?

• A)6 units of consumer goods
• B)7 units of consumer goods
• C)15 units of consumer goods
• D)22 units of consumer goods

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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.