Given Below Is the Production Possibilities Schedule for a Small

question 46

Multiple Choice

Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3

-People (and all resources) :

• A)tend to specialize in those activities in which their opportunity costs are minimized.
• B)tend to specialize in those activities in which their opportunity costs are maximized.
• C)never consider opportunity costs before specializing in a particular activity.
• D)consider only direct costs while choosing to specialize in a particular activity.
• E)do not act in their own self-interest but specialize in those activities which benefit others.

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Definitions:

Operating Activities

Business activities related to the day-to-day operations that generate revenue, such as sales and purchasing of inventory.

Indirect Method

In accounting, a method used to calculate cash flows from operating activities by starting with net income and adjusting for non-cash transactions.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was put into use.

Cash Dividends

The distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.