Chanel Has the Option of Purchasing One of Three Products

question 130

Multiple Choice

Chanel has the option of purchasing one of three products: Brand A,Brand B,or Brand C.The price of each product is $10.If Chanel decides to purchase Brand A,the opportunity cost of this decision is

• A)$20.
• B)Brand B or Brand C,depending on which she considers to be the highest-valued alternative forgone.
• C)Brand A.
• D)Brand B and Brand C.
• E)zero if this is a frivolous purchase with no marginal benefit.

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Definitions:

Compensation

Payment or remuneration received by an individual for services performed, which can include wages, salaries, bonuses, and commissions.

Coverdell Education Savings Account

A tax-advantaged saving account designed to pay for education expenses from elementary through post-secondary education.

Qualified Education Expenses

Expenses for education that qualify for tax benefits like deductions and credits, usually including tuition and fees.

Annuity Contract

A financial product sold by insurance companies that pays out income, and can be used as part of a retirement strategy to provide a steady income stream in later years.