The Production Possibilities Curve Illustrates the Basic Principle That

question 28

Multiple Choice

The production possibilities curve illustrates the basic principle that:

• A)the production of more of any one item will in time require smaller and smaller sacrifices of other items
• B)an economy automatically seeks that level of output that employs all of its resources
• C)if all the resources of an economy are fully used, more of one item could be produced only if less of another item is produced
• D)any production point below the curve reflects high opportunity cost
• E)any production point above the curve reflects low opportunity cost

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Definitions:

Control Chart

A tool used in statistical process control to monitor, control, and improve process performance over time by identifying variations.

Acceptance Sampling

A statistical quality control method where a random sample is tested to decide if the entire batch meets the specified quality criteria.

Operating Characteristic Curve

A graph that represents how well a quality control test correctly identifies defective items.