Suppose That One Unit of Labour Can Produce Either 5

question 26

Multiple Choice

Suppose that one unit of labour can produce either 5 units of wool or 2 pineapples.What is the opportunity cost of producing 1 pineapple?

• A)5/2 units of wool
• B)2 units of wool
• C)2/5 unit of wool
• D)5 units of wool
• E)zero

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Definitions:

Compensating Balance

A minimum bank account balance that a borrower must maintain as a condition for some types of loans and lines of credit.

Effective Annual Interest Rate

The interest rate that is adjusted for compounding over a given period. Essentially, it reflects the total interest that will be paid or earned over a year, taking into account the effect of compounding.

Inventory Turnover Rate

A financial metric measuring how often a company's inventory is sold and replaced over a period.

Sales

The total amount of goods or services sold within a specific time frame, indicating the performance and growth of a business.