The Graph Below Is Mendork's Production Possibility Curve for the Only

question 70

Multiple Choice

The graph below is Mendork's production possibility curve for the only two goods that it produces-quirks and quarks.

-Refer to the graph above to answer this question.If Mendork's current production is at point B,what is the opportunity cost of one more quark as output changes from point B to A?

• A)0.04 quirks.
• B)4 quirks.
• C)400 quirks.
• D)1 quirk.
• E)0.4 quirks.

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Definitions:

Avoidable Expenses

Costs that can be eliminated if a particular decision is made, such as discontinuing a product or service.

Fixed Manufacturing Expenses

Fixed expenses that are not affected by changes in production or sales quantities, like rent, salaries, and insurance.

Fixed Selling Expenses

Costs associated with the selling process that do not vary with sales volume, such as salaries of sales staff and advertising fees.

Net Operating Income

Net Operating Income, or NOI, is a measure of a company's profitability from its regular, core business operations, excluding expenses like interest and taxes.