Use the Following to Answer Questions: Table: Production Possibilities for Italy

question 251

Multiple Choice

Use the following to answer questions: Table: Production Possibilities for Italy and Belgium Labor Hours Needed to Make One
$\begin{array}{lcccc} &{\text { Pound of: }} && \text { Pounds produced in } \mathbf{4 0} \text { hours: } \\\hline & \text { Linen } & \text { Pasta } & \text { Linen } & \text { Pasta } \\\hline \text { Italy } & 10 & 4 & 4 & 10 \\\text { Belgium } & 2 & 8 & 20 & 5 \\\hline\end{array}$
-(Table: Production Possibilities for Italy and Belgium) According to the table on production possibilities for Italy and Belgium, the opportunity cost of 1 pound of linen for Italy is:

• A) 10 pounds of pasta.
• B) 1/4 pound of pasta
• C) 4 pounds of pasta
• D) 2 1/2 pounds of pasta

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Definitions:

Stockholders

The owners of a corporation.

Standard Costs

Predetermined costs for materials, labor, and overhead that are used as benchmarks to evaluate actual production costs.

Technology

The application of scientific knowledge for practical purposes, especially in industry and in our daily lives to solve problems or create useful products.

Inventory

A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold. These are considered liquid assets.