Jamie Has Enough Money to Buy Either a Mountain Dew

question 75

Multiple Choice

Jamie has enough money to buy either a Mountain Dew, a Pepsi, or a bag of chips. He chooses to buy the Mountain Dew. The opportunity cost of the Mountain Dew is

• A) the Mountain Dew.
• B) the Pepsi and the bag of chips.
• C) the Pepsi or the bag of chips, whichever is the highest-valued alternative forgone.
• D) the Pepsi, because it is a drink as is the Mountain Dew.
• E) zero because he enjoys the Mountain Dew.

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Definitions:

Asset Purchase

A transaction where a buyer acquires specific assets and liabilities from a seller rather than buying the company's stock.

Federal Law

Laws passed by the United States Congress and signed by the President. Federal laws apply throughout the country, overriding state laws where conflicts occur.

Domestic Corporations

Companies that are incorporated (i.e., formed under the corporate laws) in and operate within the country in which they were founded.

Board of Directors

A group of individuals elected to represent shareholders and govern the affairs of a corporation.