Suppose That a Typical German Factory Can Produce 20 Cameras

question 74

Multiple Choice

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in the United States is

• A) 10 computers per camera.
• B) 2 computers per camera.
• C) 1 computer per camera.
• D) 1/20 of a computer per camera.

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Definitions:

Cost of Merchandise Sold

An expense account that reflects the direct costs associated with the goods sold by a company during an accounting period.

Equation

A mathematical statement that asserts the equality of two expressions, represented by the symbol "=".

Gross Profit

Sales minus the cost of merchandise sold.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities.