Hutch Technology Makes Computer Monitors, Which Sell for $500 Each

question 54

Multiple Choice

Hutch Technology makes computer monitors, which sell for $500 each. What is the opportunity cost of producing ten monitors?

• A) $5,000
• B) the other goods that could be produced with the resources that produce the ten monitors
• C) the profits that Hutch earns when it sells the ten monitors
• D) the profits that Hutch loses if it does not produce the monitors
• E) All of the above are correct.

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Definitions:

Fair Value

An estimate of the market value of an asset or liability, reflecting current conditions and market perceptions.

Voting Stock

Shares in a company that grant the holder the right to vote on corporate matters, typically related to the election of the board of directors.

Contingent Payment

A payment that is due only if specific conditions are met, typically used in agreements where future outcomes can influence the amount or timing of the payment.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.