Use the Following Scenario to Answer the Questions That Follow

question 81

Multiple Choice

Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
-Jim's opportunity cost of producing one pound of cheese is ________ house(s) .

• A) 1/500
• B) 1/250
• C) 1/10
• D) 250
• E) 500

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Definitions:

Milk Run

A delivery method where a single truck collects cargoes from several suppliers or delivers goods to multiple customers, optimizing transportation costs and efficiency.

Single Supplier

A procurement strategy where all goods or services are sourced from one exclusive supplier, potentially simplifying operations but increasing risk.

Multiple Retailers

Retail operators who own and manage more than one retail outlet, spreading across various locations.

Quasi-Market Prices

Prices that are influenced by regulatory or policy interventions rather than purely by market supply and demand dynamics.