The Negative Slope of the Production Possibilities Frontier Represents the Idea

question 168

Multiple Choice

The negative slope of the production possibilities frontier represents the idea

• A) that free lunches are possible.
• B) of tradeoffs, that in order to produce more of one good, the nation must produce less of another.
• C) of unemployment.
• D) of inefficient production.
• E) that prices rise as less is produced.

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Definitions:

Equivalent Units

A concept in cost accounting used to apportion costs in process costing, based on the stage of completion.

Ending Work In Process

The value of goods that are partially completed at the end of an accounting period, not yet ready for sale.

Equivalent Units

A concept in cost accounting used to express the amount of materials or labor in terms of fully completed units.

Conversion Costs

The combination of direct labor costs and manufacturing overhead costs that are incurred to convert raw materials into finished products.