Use the Figure Below to Answer the Following Questions

question 147

Multiple Choice

Use the figure below to answer the following questions.

Figure 2.1.2
-Consider the production possibilities frontier in Figure 2.1.2. Which of the following statements is false?

• A)Resources are not equally useful in all activities.
• B)Points inside the production possibilities frontier indicate unused or misallocated resources.
• C)Starting at point A, an increase in the production of Y will shift the production possibilities frontier outward.
• D)The opportunity cost of producing Y increases as production of Y increases.
• E)The opportunity cost of producing X increases as production of X increases.

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and considered a part of the product's cost.

Direct Labour Hours

This term describes the actual hours worked by employees who are directly involved in the manufacturing process.

Strategic Objectives

Long-term goals that an organization aims to achieve to implement its strategy and fulfill its mission.

Discretionary Fixed Costs

Those fixed costs that arise from annual decisions by management to spend on certain fixed cost items, such as advertising and research.