The Slope of a Production Possibilities Frontier Measures

question 72

Multiple Choice

The slope of a production possibilities frontier measures:

• A)the opportunity cost of producing one good in terms of the other.
• B)the trade-off inherent in the production of one good versus the other.
• C)how much of one good that must be given up in order to produce the other.
• D)All of these statements are true.

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate.

June

The sixth month of the year in the Gregorian calendar.

Variable Overhead Efficiency Variance

The difference between the actual variable overheads incurred and the standard variable overheads expected for the actual production, due to efficiency.

February

The second month of the year in the Gregorian calendar, typically consisting of 28 days, or 29 in leap years.