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.

---

Definitions:

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Fixed Costs

Expenses that do not change with the level of goods or services produced over the short term; these include items like rent, salaries, and insurance.

Depreciation Expense

The distribution of a physical asset's cost over its lifespan to account for depreciation or becoming outdated.