Figure 3-3 ​

question 226

Multiple Choice

Figure 3-3
​
-In Figure 3-3, a shift from A to B seems most consistent with which of the following scenarios?

• A)Society has decided to give guns lower priority.
• B)Technological advances have been greater for guns than for butter.
• C)The society has experienced a massive immigration of labor.
• D)There are unemployed resources in the production of both guns and butter.

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Definitions:

Ending Inventory

The valuation of goods available for sale at the end of an accounting period; part of the calculation of cost of goods sold.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made on a periodic basis, rather than being updated continuously.

First-In, First-Out

An inventory valuation method where the goods first purchased or produced are also the first to be sold, impacting the cost of goods sold and inventory value.

Average Cost

A calculation used in finance and economics that divides the total cost of production by the number of goods produced, yielding the cost per unit.