The Production Possibilities Frontier Shows the Opportunity Cost of One

question 174

True/False

The production possibilities frontier shows the opportunity cost of one good as measured in terms of the other good.

---

Definitions:

Plant Expansion

The process of increasing the capacity or capabilities of a manufacturing or production facility.

Sinking Fund Deposits

Money regularly set aside by a company to repay a debt or replace an asset in the future.

Compounded Annually

An investment or loan interest calculation method where interest is added to the principal sum at the end of each year, with future interest then earned on the new total.

Present Value

Today's value of future cash flows or a lump sum, calculated using an established return rate.