Along a Production Possibilities Curve That Is Concave to the Origin

question 164

Multiple Choice

Along a production possibilities curve that is concave to the origin, what happens to the opportunity cost of production of the good on the X-axis as we move down along the curve?

• A) It first decreases, then increases.
• B) It decreases.
• C) It increases.
• D) It remains constant.

---

Definitions:

Cash Increase

An uptick in the amount of liquid assets (cash and cash equivalents) that a company or individual has on hand.

Current Ratio

Current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, by comparing current assets to current liabilities.

Net Working Capital

Net working capital is the difference between a company's current assets and current liabilities, indicating short-term financial health and the ability to cover its short-term obligations.

Factoring Receivable

The process of selling accounts receivable to a third party at a discount to quickly generate cash.