A Concave (Bowed Out from the Origin)production Possibilities Curve Would

question 103

Multiple Choice

A concave (bowed out from the origin) production possibilities curve would indicate

• A) decreasing opportunity costs.
• B) that the slope is getting smaller in absolute value.
• C) a large economy with many workers.
• D) a small economy with a handful of workers.
• E) constant opportunity costs.

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Definitions:

Contribution Margin

Contribution Margin is the selling price per unit minus the variable cost per unit, indicating how much of a product's sales contribute towards fixed expenses and profit.

Net Income

The profit of a company after all expenses and taxes have been subtracted from total revenue; a key indicator of financial health.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much contributes to covering fixed costs.

Indirect Expenses

Costs that are not directly tied to a specific product, service, or department and need to be allocated, such as utilities or rent.