Suppose That a Worker in Cornland Can Grow Either 40

question 65

Multiple Choice

Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. What is the opportunity cost of 1 bushel of oats in Cornland?

• A) 1/10 bushels of corn
• B) 1/4 bushels of corn
• C) 4 bushels of corn
• D) 10 bushels of corn

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Definitions:

General Reserve

Funds set aside out of profits for the future protection of the business and to strengthen its financial position.

Retained Earnings

The portion of a company's profits not distributed to shareholders but instead reinvested in the business or kept as reserve.

Partial Goodwill Method

An accounting approach where goodwill is calculated only for the portion of a subsidiary owned by the parent company.

Non-controlling Interest

The portion of equity interest in a subsidiary not attributable directly or indirectly to the parent company.