If a Production Possibilities Frontier Is Bowed Out (I

question 163

Multiple Choice

If a production possibilities frontier is bowed out (i.e., concave) in appearance, production occurs under conditions of

• A) constant opportunity costs.
• B) increasing opportunity costs.
• C) decreasing opportunity costs.
• D) zero opportunity costs.

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Definitions:

Labor Efficiency Variance

The difference between the actual labor hours taken to produce something and the standard labor hours expected, multiplied by the labor rate.

Direct Labor

The wages and salaries for workers who are directly involved in the production of goods.

Raw Materials

The basic materials and substances used in the initial stages of production to manufacture goods.

Standard Costs

Predicted costs associated with manufacturing or providing a service, used for budgetary control and performance analysis.