Figure 3-2 Peru's Production Possibilities Frontier

question 269

Multiple Choice

Figure 3-2
Peru's Production Possibilities Frontier

-Refer to Figure 3-2.Suppose Peru decides to increase its production of rubies by 30.What is the opportunity cost of this decision?

• A) 1/8 emerald
• B) 1/3 emerald
• C) 1 emerald
• D) 3 emeralds

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Definitions:

Variable Budget

A budget that adjusts in response to changes in activity levels or other factors, as opposed to a fixed budget.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate forecasting and analysis.

Static Budget

A fixed budget that remains unchanged over a period, regardless of variations in actual sales volume, production levels, or other operating factors.

Variable Budget

Variable Budget is a budget that adjusts based on changes in the volume of activity, allowing expenses to vary in direct proportion to changes in operational levels.