An Ice Cream Cone Costs $1

question 85

Multiple Choice

An ice cream cone costs $1.50. A can of soda costs $0.75. The relative price of an ice cream cone is

• A) 1/2 can of soda per ice cream cone, the opportunity cost of an ice cream cone.
• B) $1.50, the opportunity cost of a can of soda.
• C) 2 cans of soda per soda, the opportunity cost of an ice cream cone.
• D) $0.75, the opportunity cost of a can of soda.

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Definitions:

Equity Capital

Equity Capital is the amount of money that is invested in a company by its owners, in exchange for ownership interest in the company.

Rental Cost

The amount of money that must be paid regularly to lease a property or equipment.

Economic Profit

The distinction between aggregate income and comprehensive charges, covering both manifest and inferred expenses.

Opportunity Cost

The value of the best alternative foregone when making a decision.