Table 11-4
the Table Below Pertains to Wrexington, an Economy

question 126

Multiple Choice

Table 11-4
The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys. $$\begin{array} { | c | c | c } \text { Year } & \begin{array} { c } \text { Price of } \\\text { Meat }\end{array} & \begin{array} { c } \text { Price of a } \\\text { Tryy }\end{array} \\\hline 2004 & \$ 3 \text { per pound } & \$ 2 \\\hline 2005 & \$ 1 \text { per pound } & \$ 7 \\\hline 2006 & \$ 4 \text { per pound } & \$ 5 \\\hline\end{array}$$
-Refer to Table 11-4. The cost of the basket in 2006 was

• A)$9.
• B)$130.
• C)$140.
• D)$270.

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Definitions:

Known Liability

Obligations or debts that have been incurred and are measurable with a high degree of certainty.

Vacation Benefits

Employee benefits that provide paid or unpaid time off from work for holidays, vacations, and personal time.

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its interest expense to its earnings before interest and taxes.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds, typically evident in the form of interest payments on loans, bonds, or credit lines.