Why Are Production Possibilities Frontiers Usually Bowed Outward

question 19

Multiple Choice

Why are production possibilities frontiers usually bowed outward?

• A) The more resources a society uses to produce one good, the fewer resources it has available to produce another good.
• B) It reflects the fact that the opportunity cost of producing a good falls as more of the good is produced.
• C) It is because of the effects of technological change.
• D) Resources are specialized; that is, some are better at producing particular goods rather than other goods.

Understand the effects of buying and returning merchandise on financial statements.

Appreciate the differences between the perpetual and periodic inventory systems.

Identify the types of accounts affected by the purchase and sale of merchandise.

Understand the implications of payment terms on accounting entries.