Graph 2-5 -Refer to Graph 2-5.In the Production Possibilities Frontier Shown, the Frontier

question 56

Multiple Choice

Graph 2-5
-Refer to Graph 2-5.In the production possibilities frontier shown, the shift of the frontier from A to B was most likely caused by which of the following?

• A)more capital available in the economy
• B)more labour available in the economy
• C)a general technological breakthrough
• D)technological improvement in the production of clothing

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Definitions:

Variable Costs

Costs that change in proportion to the level of goods or services produced by a business.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenues.

Variable Production Cost

Costs that fluctuate with the production volume, including variable manufacturing overhead, direct materials, and direct labor.

Fixed Production Cost

Costs that do not vary with the level of output, such as salaries, rent, and depreciation of production facilities.