Use the Following Scenario to Answer the Questions That Follow

question 132

Multiple Choice

Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
-What is the opportunity cost for Ricardo to produce one computer?

• A) 1/4 smartphone
• B) 1/2 smartphone
• C) 1 smartphone
• D) 2 smartphones
• E) 4 smartphones

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Definitions:

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, reinvestment in the business, or to pay debt, rather than being paid out as dividends.

Additional Paid-In Capital

The excess amount paid by investors over the par value of shares, reflecting the additional capital contributed to a corporation.

Accumulated Comprehensive Income

The total of all net income and other comprehensive income items that have been accumulated over the life of a company.

Net Income

The total profit or loss a company generates from its operations, after subtracting all expenses, taxes, and costs.