Figure 25-1

question 68

Multiple Choice

Figure 25-1.On the horizontal axis,K/L represents capital (K) per worker (L) .On the vertical axis,Y/L represents output (Y) per worker (L) .
-Refer to Figure 25-1.Choose a point anywhere on the curve and call it point A.If the economy is at point A in 2011,then it will definitely remain at point A in 2012 if,between 2011 and 2012,

• A)the quantity of physical capital remains constant;the number of workers doubles;and human capital,natural resources,and technology all double as well.
• B)the quantity of physical capital doubles;human capital,natural resources,and technology all double as well;and the number of workers remains constant.
• C)the quantity of physical capital doubles;the number of workers doubles;and human capital,natural resources,and technology all double as well.
• D)the quantity of physical capital doubles;the number of workers doubles;and human capital,natural resources,and technology remain constant.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Absorption Costing

An accounting method that includes all of the manufacturing costs in the cost of a product, including direct materials, direct labor, and both variable and fixed overhead.

Profits

The financial gain made in a transaction or business operation after subtracting all expenses from revenue.

Units Produced

The total quantity of finished goods a manufacturing process produces in a specific period, reflecting production levels and efficiency.