Mallory Decides to Spend Three Hours Working Overtime Rather Than

question 177

Multiple Choice

Mallory decides to spend three hours working overtime rather than watching Netflix with her friends.She earns $9 an hour.What is her opportunity cost of working

• A)the $27 she earns working
• B)the $27 minus the enjoyment she would have received from watching Netflix
• C)the enjoyment she would have received had she watched Netflix
• D)nothing, because she would have received less than $27 of enjoyment from Netflix

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Definitions:

LIFO

The "last in, first out" method of inventory valuation, where the most recently acquired items are considered sold first, used in periods of inflation to increase cost of goods sold and reduce taxes.

Periodic inventory system

An inventory accounting system where updates to inventory accounts are made periodically, typically at the end of a financial period, rather than after each transaction.

Ending inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus cost of goods sold.

Periodic system

A periodic system is an inventory management approach where inventory levels and the cost of goods sold are calculated at the end of each accounting period, rather than continuously.