Figure 3-2 Brazil's Production Possibilities Frontier

question 13

Multiple Choice

Figure 3-2
Brazil's Production Possibilities Frontier
-Refer to Figure 3-2.The fact that the line slopes downward reflects the fact that

• A)for Brazil,it is more costly to produce peanuts than it is to produce cashews.
• B)Brazil will produce more peanuts and fewer cashews as time goes by.
• C)Brazil faces a tradeoff between producing peanuts and producing cashews.
• D)Brazil should specialize in producing cashews.

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Definitions:

Direct Labor Hours

The total number of work hours spent by employees who directly manufacture or produce goods.

Predetermined Overhead Rate

An estimate used to allocate overhead costs to products or job orders, calculated before the costs are incurred.

Finished Goods

Items that are finished with the production phase but are still awaiting sale or delivery to consumers.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor costs.