Exhibit 2-8 Production Possibilities Curve Data -As Shown in Exhibit 2-8, a Total Output of 14

question 101

Multiple Choice

Exhibit 2-8 Production possibilities curve data $$\begin{array} { | l | r | r | r | r | r | r | } \hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \\\hline \text { Capital goods } & 15 & 14 & 12 & 9 & 5 & 0 \\\text { Consume goods } & 0 & 2 & 4 & 6 & 8 & 10 \\\hline\end{array}$$
-As shown in Exhibit 2-8, a total output of 14 units of consumer goods and 1 unit of capital goods is:

• A) the result of maximum use of the economy's labor force.
• B) an efficient way of using the economy's scarce resources.
• C) unobtainable in this economy.
• D) less than the maximum rate of output for this economy.

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Definitions:

Overhead Cost

Rephrased: Expenditures related to the business's general operations, not directly linked to any specific product or service.

Direct Materials

Raw materials that are directly used in the production of a product and can be easily attributed to that product.

Direct Labor

The cost of workers who can be directly traced to the production of products.

Overhead Cost

Indirect expenses related to the day-to-day operations of a business, such as rent, utilities, and administrative salaries.