At One Point Along a PPF 40 Tons of Wheat

question 48

Multiple Choice

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is ________per ton of wheat.

• A) 1/10 ton of rice
• B) 1/2 ton of rice
• C) 10 tons of rice
• D) 4/7 ton of rice

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Definitions:

Return On Investment (ROI)

Net operating income divided by average operating assets. It also equals margin multiplied by turnover.

Depreciation

The systematic allocation of the cost of an asset over its useful life.

Investment Center

A business unit within a company that is responsible for its own revenues, expenses, and asset investments, with its performance measured by its ability to generate income relative to its assets.

Minimum Required Return

The lowest acceptable return on an investment, based on risk tolerance and financial goals.