In Order to Have a Linear Production Possibilities Frontier (One

question 89

Multiple Choice

In order to have a linear production possibilities frontier (one that is not bowed out) , it must be that:

• A) there are no trade-offs
• B) the trade-off between two goods is constant
• C) the trade-off between two goods is increasing
• D) the trade-off between two goods is decreasing

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Definitions:

Depreciable Cost

The cost of a fixed asset minus its salvage value, which is the total amount that can be depreciated over its useful life.

Initial Cost

The amount of money spent to acquire or start up an asset or investment, excluding any subsequent costs for maintenance or operation.

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since the asset was acquired and made available for use.

Machinery

Heavy industrial equipment used in the production of goods or for performing services, which can include machines for manufacturing, assembly, and packaging.