If the Production Possibilities Frontier Between Two Goods Is a Straight

question 217

Multiple Choice

If the production possibilities frontier between two goods is a straight line,then the

• A) opportunity cost is not a ratio.
• B) resources are equally productive in both goods.
• C) line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points.
• D) Both answers A and C are correct.
• E) Both answers A and B are correct.

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Definitions:

Direct Labor-Hours

The cumulative number of hours put in by workers who are directly engaged in producing goods or delivering a service.

Manufacturing Overhead

Costs related to the production environment that cannot be directly tied to the finished product, such as maintenance expenses, and are necessary for the manufacturing process.

Underapplied Manufacturing Overhead

A scenario in which the overhead costs assigned to manufacturing are lower than the overhead expenses that were actually spent.

Allocation

Allocation involves distributing or assigning costs, resources, or revenues among various accounts, departments, or products based on specific criteria or formulas.