Why Would It Be a Mistake to Treat Opportunity Costs

question 121

Multiple Choice

Why would it be a mistake to treat opportunity costs and explicit monetary costs as identical?

• A)Because sometimes the market does not function well.
• B)Because opportunity costs are different for different goods.
• C)Because there are trade-offs involved in any decision.
• D)Because of existence of efficient markets.

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Definitions:

Contribution Margin Ratio

The percentage of each sales dollar that remains after variable costs are subtracted, indicating how much revenue contributes towards covering fixed costs and generating profit.

Tiling Grout

Tiling grout is a dense fluid used to fill gaps or joints between tiles, often for reinforcement, sealing, or decoration.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in sales volume, indicating the proportion of fixed costs in its cost structure.

Tiling Grout

A dense fluid which is used to fill gaps or used as reinforcement in existing structures between tiles during installation.