At One Point Along a PPF, 50 Tons of Coffee

question 309

Multiple Choice

At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is

• A) 7/5 of a ton of bananas per ton of coffee.
• B) 1/2 of a ton of bananas per ton of coffee.
• C) 5/7 of a ton of bananas per ton of coffee.
• D) 2 tons of bananas per ton of coffee.

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its earnings without needing to issue new equity or take on additional debt.

Utilizes Assets

The process of efficiently using company resources or assets to generate revenue or achieve strategic objectives.

External Financing

It refers to the funds a business obtains from outside sources, such as bank loans, venture capital, or issuing bonds or equity, to finance its operations or expansion.

Sales Increase

The situation where a company experiences growth in its revenue from the sale of goods or services over a specific period.