If Production Involves Constant Opportunity Cost, the Production Possibilities Curve

question 108

Multiple Choice

If production involves constant opportunity cost, the production possibilities curve

• A)is "bowed inward." 
• B)is a straight line.
• C)is "bowed outward." 
• D)is a wavy line.
• E)has an unpredictable shape.

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Definitions:

Conversion Cost

The combined costs of direct labor and manufacturing overheads that are incurred to convert raw materials into finished goods.

Work In Process

Inventory that includes items in production but not yet completed, representing a stage between raw materials and finished goods.

Unit Conversion Cost

The cost associated with converting raw materials into a finished product on a per-unit basis.

Equivalent Units

A concept used in cost accounting to express the amount of work done in terms of fully completed units of output during a period.