Use the Information Below to Answer the Following Questions

question 3

Multiple Choice

Use the information below to answer the following questions.
Fact 2.4.1
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.
-Given Fact 2.4.1, the opportunity cost of producing 1 loaf of bread is

• A)20 minutes (1/3 hour)for Andy and 1 hour for Rolfe.
• B)1/3 kilogram of butter for Andy and 1 kilogram of butter for Rolfe.
• C)3 kilograms of butter for Andy and 1 kilogram of butter for Rolfe.
• D)8 kilograms of butter for both Andy and Rolfe.
• E)not calculable from the given information.

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Definitions:

Opportunity Cost

The value of the next best alternative that is foregone as a result of making a decision to pursue a particular action.

Holding Money

The act of keeping money in cash or in accounts as savings rather than investing it.

Interest Rate

The interest rate is the cost of borrowing money or the return on investment for savings, expressed as a percentage of the principal amount per period of time.

Large Denomination Time Deposits

Savings accounts or Certificates of Deposit (CDs) with high minimum deposit requirements, typically offering better interest rates but less liquidity.