Suppose That a Worker in Country a Can Make Either

question 14

Multiple Choice

Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Suppose Country B's population of workers increased to 600.Which of the following statements is now true?

• A)Country B's production possibilities curve has rotated out from the x-axis.
• B)Country B's production possibilities curve has shifted straight out.
• C)Country B's production possibilities curve has shifted straight in.
• D)Country B's production possibilities are now more limited because of crowding.

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Definitions:

Operations

Operations refer to the day-to-day activities involved in the running of a business for the purpose of producing value for the stakeholders.

Variable Costing

An accounting method that includes only variable production costs in the cost of goods sold, excluding fixed factory overhead.

Absorption Costing

An accounting method that assigns all manufacturing costs, including both fixed and variable, to products, fully capturing the cost of production.

Fixed Manufacturing Overhead

Regular, unchanged costs incurred during the manufacturing process, regardless of the level of output.