Table 3-10 Juanita and Shantala Run a Business That Programs and Tests

question 15

Multiple Choice

Table 3-10
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.

-Refer to Table 3-10.Which of the following points would be on Juanita's production possibilities frontier,based on a 40-hour week?

• A) (120 cellular phones programmed, 295 cellular phones tested)
• B) (130 cellular phones programmed, 225 cellular phones tested)
• C) (140 cellular phones programmed, 155 cellular phones tested)
• D) Both (a) and (b) would be on Juanita's production possibilities frontier.

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Definitions:

Cost of Equity

The return that shareholders require for investing in a company's equity, serving as a measure of the risk involved.

Preferred Stock

Stock with dividend priority over common stock, normally with a fixed dividend rate, often without voting rights.

Common Stock Dividends

Dividends that are paid to holders of a company's common stock, often from the company's profits.

Dividend Increases

An action by a company to increase the amount of dividends paid out to shareholders, usually as a result of increased profitability.