-Refer to the Above Diagram

question 244

Multiple Choice

-Refer to the above diagram.The movement down the production possibilities curve from point A to point E suggests that the production of:

• A) computers,but not bicycles,is subject to increasing opportunity costs.
• B) bicycles,but not computers,is subject to increasing opportunity costs.
• C) both bicycles and computers is subject to constant opportunity costs.
• D) both bicycles and computers is subject to increasing opportunity costs.

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Definitions:

Cash Cycle

The cash cycle is the period between the purchase of inventory and the collection of receivables from the sale of that inventory.

Receivables Period

The usual period a business needs to obtain payments from customers for goods or services sold on a credit basis.

Inventory Period

The time it takes for a company to turn its inventory into sales, often measured in days or weeks.

Cash Cycle

The period between the acquisition of inventory by a business and the collection of accounts receivable generated by the sale of that inventory.