Which of the Following Would Shift a Nation's Production Possibility

question 155

Multiple Choice

Which of the following would shift a nation's production possibility frontier outward?

• A) Discovering a cheap way to convert sunshine into electricity.
• B) An increase in demand for the nation's products.
• C) A decrease in the unemployment rate.
• D) A law requiring workers to retire at age 50.

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Definitions:

Common Fixed Expenses

Expenses that remain constant in total regardless of changes in the level of activity or volume of production.

Variable Expenses

Costs that change in proportion to the level of activity or volume of production in a company.

Traceable Fixed Expenses

Fixed costs that can be directly associated with a specific business segment or product line.

Fixed Manufacturing Overhead

Costs in the production process that remain constant regardless of the production volume, such as rent or salaries of permanent staff.