Moving Between Two Points on a PPF,a Country Gains 6

question 18

Multiple Choice

Moving between two points on a PPF,a country gains 6 automobiles and forgoes 3 trucks.The opportunity cost of 1 automobile is

• A) 3 trucks.
• B) 6 automobiles - 3 trucks.
• C) 2 trucks.
• D) 1/2 of a truck.
• E) 1 automobile.

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Definitions:

Production Budget

An estimate of the total units that must be produced in a given period to meet sales demands and inventory requirements.

Net Operating Income

A financial metric that calculates a company's income after operating expenses are subtracted but before interest and taxes are deducted.

Raw Materials

Basic materials that are used in the production process to manufacture goods.

Finished Unit

A product that has completed all stages of production and is ready for sale to consumers.