Gwen Had Only $10 Yesterday

question 99

Multiple Choice

Gwen had only $10 yesterday.She was uncertain whether to go out for lunch or to buy beer.In the end,she bought beer.Which of the following statements is correct?

• A)The choice of the beer and not lunch is an example of constant costs.
• B)The cost of buying beer is less than lunch.
• C)The opportunity cost of beer is lunch.
• D)The opportunity cost of beer is $10.

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Definitions:

Off-Balance Sheet Financing

Financial obligations not recorded on the balance sheet of a company, used to keep debt levels low from a reporting perspective.

Financial Leverage

The use of borrowed funds in order to amplify returns from an investment.

Leasing

A financial arrangement where a firm or individual obtains the use of an asset for a specific period in exchange for payment, typically without owning the asset.

Tax Deduction

An eligible expense that can reduce an individual's or company's taxable income.