The Production Possibilities Curve Represents the Maximum Feasible Production Combinations

question 343

Multiple Choice

The production possibilities curve represents the maximum feasible production combinations resulting from

• A) the mix of current resources that utilizes all available inputs using current technology.
• B) a fixed amount of demand by consumers.
• C) the lack of trade-offs in production.
• D) the lack of technology used in production.

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Definitions:

Gross Profit

The financial gain made after deducting the cost of goods sold from total revenue.

Variance

The difference between planned or budgeted amounts and the actual amounts incurred, used for performance evaluation and control.

Actual Costs

The true expenses incurred in the production of a product or the provision of a service, as opposed to estimated or budgeted costs.

Material Variance

Material variance is the difference between the actual cost of materials used in the production process and the expected (or standard) cost, used to analyze and control costs in manufacturing.