If the Production Possibilities Curve Is a Downward Sloping Straight

question 314

Multiple Choice

If the production possibilities curve is a downward sloping straight line, then

• A) resources are highly specialized, making it difficult to use them for alternative uses.
• B) technological change has increased.
• C) production is efficient only when producing at the mid-point.
• D) all resources must be perfectly adaptable for alternative uses.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenues.

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the cushion a business has before it incurs a loss.

Variable Expenses

Expenditures that change in direct correlation with production levels or the quantity of sales, including costs like raw materials and direct labor.

Fixed Expenses

Costs that do not change regardless of the level of production or business activity.