Use the Information Below to Answer the Following Questions

question 17

Multiple Choice

Use the information below to answer the following questions.
Fact 2.3.1
In an eight-hour day,Andy can produce either 24 loaves of bread or 8 kilograms of butter.In an eight-hour day,Rolfe can produce either 8 loaves of bread or 8 kilograms of butter.
-Refer to Fact 2.3.1.The opportunity cost of producing 1 kilogram of butter is

• A)20 minutes (1/3 hour)for Andy and 1 hour for Rolfe.
• B)1 hour for Andy and 1 hour for Rolfe.
• C)3 loaves of bread for Andy and 1/3 loaf of bread for Rolfe.
• D)3 loaves of bread for Andy and 1 loaf of bread for Rolfe.
• E)8 loaves of bread for Rolfe and 24 loaves of bread for Andy.

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Definitions:

Derivatives Market

A financial market for derivative securities like futures and options, where assets are based on the value of other underlying financial instruments.

TED Spread

The difference between the interest rates on three-month U.S. Treasury bills and three-month Eurodollars having identical expiration dates, serving as an indicator of credit risk in the general economy.

LIBOR

The London Interbank Offered Rate, once a benchmark interest rate at which major global banks lend to one another.

Treasury-Bill Rate

The interest rate yield on U.S. government short-term debt securities known as treasury bills.