Refer to the Graph Shown

question 38

Multiple Choice

Refer to the graph shown. Destruction of some of the resources necessary to produce both guns and butter would result in what movement?

• A) From A to B to C to D in diagram a.
• B) From C to D to A to B in diagram a.
• C) From X to Y to X to Z in diagram b.
• D) From X to Z to X to Y in diagram b.

---

Definitions:

Residual Value

Residual value is the estimated value of an asset at the end of its useful life, reflecting what it could be sold for or its salvage value.

Fixed-Percentage Method

The Fixed-Percentage Method is a depreciation technique where a constant percentage of the asset's book value is depreciated each year, resulting in decreasing annual depreciation expenses.

Residual Value

The estimated amount that an asset is expected to realize upon its disposal at the end of its useful life.

Annual Depreciation

The portion of the total cost of a tangible asset that is expensed each year over its useful life.