Use the Following to Answer Questions

question 208

Multiple Choice

Use the following to answer questions:
Scenario: Linear Production Possibility Frontier
Largetown has a linear production possibility frontier, and it produces socks and shirts with 80 hours of labor. The table shows the number of hours of labor necessary to produce one pair of socks or one shirt.
-(Scenario: Linear Production Possibility Frontier) Look at the scenario Linear Production Possibility Frontier. If Largetown's labor resource decreases by 40 hours, the opportunity cost of producing shirts:

• A)increases.
• B)decreases.
• C)does not change.
• D)may or may not change depending upon the number of pairs of socks it wishes to produce.

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Definitions:

Market Share

The portion of a market controlled by a particular company or product.

Profitability

A measure of the efficiency of a company in generating profits from its revenue.

Unit Costs

Unit costs refer to the cost incurred by a company to produce, store, and sell one unit of a particular product or service.