Production Possibility Schedules for Two South Pacific Island Nations

question 63

Multiple Choice

Production Possibility Schedules for Two South Pacific Island Nations In Tuvalu, the opportunity cost of producing one coconut (in terms of mangoes) is:

• A) 0.
• B) 1/3.
• C) 3.
• D) 400.

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Definitions:

Direct Labour

The wages paid to workers directly involved in the production of goods or services, considered a variable cost.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services.

Net Operating Income

The total profit of a business after operating expenses are subtracted from gross profit but before deducting interest and taxes.

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can be used to cover fixed costs and contribute to profit.