If the Production Possibilities Frontier for Two Goods Is Shown

question 73

Multiple Choice

If the production possibilities frontier for two goods is shown as a straight line, this implies that

• A)there is no trade-off between the two goods.
• B)the principle of increasing costs is present.
• C)the slope of the production possibilities frontier is increasing.
• D)there are no specialized resources used in the production of these goods.

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Definitions:

Ending Inventory

The total value of all unsold goods remaining at the end of an accounting period, calculated for cost of goods sold reporting.

Ending Merchandise Inventory

The final value of goods available for sale at the end of an accounting period.

Overstated

An accounting term used when the reported value of a financial statement element is higher than its true value.

Understated

Describes an amount reported in financial statements that is less than the true, fair, or actual amount.