Use the Following to Answer Questions

question 270

Multiple Choice

Use the following to answer questions :
Figure: Strawberries and Submarines II
-(Figure: Strawberries and Submarines II) Look at the figure Strawberries and Submarines II. Suppose the economy is operating at point A. The first submarine, which is achieved at point B, would have an opportunity cost of _____ million tons of strawberries.

• A)50
• B)150
• C)400
• D)950

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Definitions:

Unit Variable Costs

The variable costs that are incurred for each unit of production, including materials and labor directly associated with the manufacturing of the product.

Operating Income

The income a business receives after subtracting operating costs from its gross profit.

Fixed Costs

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance premiums.

Variable Costs

Costs that change in proportion to the level of production or business activity.