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

question 201

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 Belgium is:

• A) 5 pounds of pasta.
• B) 4 pounds of pasta.
• C) 1/4 pound of pasta.
• D) 20 pounds of pasta.

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Definitions:

Patent Amortization

The gradual expense recognition of the cost of a patent over its useful life, reflecting the consumption of the patent's economic benefits.

Accumulated Depreciation

The cumulative amount of depreciation expense that has been recorded against a fixed asset since it was acquired and put into use.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, indicating the ownership equity spread among shareholders.

Fixed Asset Turnover Ratio

A performance metric that measures a company's efficiency in using its fixed assets to generate sales, calculated as net sales divided by the average net fixed assets.