Choose the Correct Statements

question 52

Multiple Choice

Choose the correct statements.
1.Opportunity cost of a good is the increase in the quantity produced of one good divided by the decrease in the quantity produced of another good as we move along the PPF.
2.The opportunity cost of an action is the highest- valued alternative forgone.
3.Opportunity cost is a ratio.
4.There is no relationship between the opportunity cost of producing an additional good measured on the
X- axis and the opportunity cost of producing an additional good measured on the y- axis.

• A)Statements 3 and 4 are correct.
• B)Statements 2 and 3 are correct.
• C)Statements 2 and 4 are correct.
• D)Statements 1 and 3 are correct.
• E)Statements 1 and 2 are correct.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, typically recognized on the income statement.

Goodwill

An intangible asset that arises when one company acquires another for a price higher than the fair value of its net tangible assets, representing elements like brand, customer base, and reputation.

Acquisition-Date Fair Value

The value of an asset or liability estimated at the date of acquisition based on its current market value.

Intra-Entity Debt Transactions

Financial obligations or loans between entities within the same corporate group, not necessarily evidenced in consolidated financial statements until settled externally.