An Economy Produces Apples and Oranges

question 167

Multiple Choice

An economy produces apples and oranges.The dashed line in the figure below represents the production possibilities curve of this economy.Suppose a productivity catalyst in the form of improved agricultural technology is introduced in the economy.In this case,the production possibilities curve will ________.

• A) change to PPC 1
• B) change to PPC 2
• C) change to PPC 3
• D) remain unchanged

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Definitions:

Master Budget

An integrated financial plan that includes all of the individual budgets related to sales, cost of goods sold, operations, inventory, and financing.

Credit Sales

Sales made by a business that are not paid for at the time of purchase but are charged to the customer's account to be paid for at a later date.

Production Budget

A production budget estimates the number of units that must be produced during a specific period to meet sales and inventory needs.

Ending Inventory

The total value of all unsold goods that a company has in its possession at the end of a reporting period, important for calculating cost of goods sold.