A Normal Production Possibilities Frontier Has a

question 65

Multiple Choice

A normal production possibilities frontier has a

• A)positive slope and is steeper near the horizontal axis than near the vertical axis.
• B)negative slope and is steeper near the horizontal axis than near the vertical axis.
• C)positive slope and is steeper near the vertical axis than near the horizontal axis.
• D)negative slope and is steeper near the vertical axis than near the horizontal axis.
• E)zero slope, and it does not touch the horizontal axis.

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Definitions:

Units-Of-Production Method

A depreciation method that allocates the cost of an asset over its useful life based on the amount of production or use during the period.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or other declines in value.

Fixed Asset Turnover Ratio

A financial metric used to evaluate how effectively a company uses its fixed assets to generate sales.

Operating Income

The profit realized from a business's core operations, calculated before interest and taxes.