Suppose That in Japan One Worker Can Produce Either Four

question 318

Multiple Choice

Suppose that in Japan one worker can produce either four cars or 5 tons of grain per year. What is the opportunity cost of producing one car in Japan?

• A) 0.4 ton of grain
• B) 0.8 ton of grain
• C) 1.25 tons of grain
• D) 2.5 tons of grain

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Definitions:

Employer Payroll Taxes

Taxes that employers are required to pay on behalf of their employees, including Social Security and Medicare taxes in the United States.

Manufacturing Overhead Applied

The portion of manufacturing overhead costs allocated to each unit of production.

Job Cost System

An accounting method used to track the expenses of a specific job or project and compare those expenses to the project’s revenue, helping in assessing profitability.

Cost Accounting

A type of accounting that focuses on capturing a company's total cost of production by assessing its variable and fixed costs.