Table 3-37 ​

question 303

Multiple Choice

Table 3-37 ​
-​Refer to Table 3-37. Sarah and Charles are both potters and each can switch between the production of vases and mugs at a constant rate. The table shows the total number of vases or decorative mugs that each person can produce in a six-hour session of producing pottery. Sarah's opportunity cost to produce one vase is

• A)​0.25 mugs and Charles's opportunity cost of producing one vase is 2.5 mugs
• B)​4 mugs and Charles's opportunity cost of producing one vase is 2.5 mugs
• C)​0.25 mugs and Charles's opportunity cost of producing one vase is 0.40 mugs
• D)​4 mugs and Charles's opportunity cost of producing one vase is 0.40 mugs

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Definitions:

IFRS

IFRS stands for International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) aiming at making global financial statements more comparable, transparent, and reliable.

Marketable Securities

Marketable securities are liquid financial instruments that can be quickly converted into cash at their current market prices.

Trading Securities

Financial assets that a firm holds for the purpose of selling them in the short term to profit from price changes.

Amortized Cost

The amount at which a financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortization.