As a Country That Has a Bowed-Out Production Possibilities Frontier

question 369

Multiple Choice

As a country that has a bowed-out production possibilities frontier produces more of one good, the opportunity cost of a unit of that good

• A) might increase or decrease.
• B) remains the same.
• C) increases.
• D) decreases.

---

Definitions:

Material Price Variances

The difference between the actual cost of materials and the standard cost multiplied by the actual quantity of materials used.

Cost Control

The process of monitoring and managing the expenses of a business to adhere to a budget or increase profitability.

Flexible Budget Cost Variance

The difference between actual costs and the costs allocated in the flexible budget, which adjusts based on actual levels of activity.

Quantity Variance

A variance that is computed by taking the difference between the actual quantity of the input used and the amount of the input that should have been used for the actual level of output and multiplying the result by the standard price of the input.