Suppose It Takes Dan 5 Minutes to Make a Sandwich

question 150

Multiple Choice

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. What is the opportunity cost to Dan of making a sandwich?

• A)1/3 of a smoothie
• B)3 smoothies
• C)15 smoothies
• D)5 smoothies

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Definitions:

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Depreciation

The process of allocating the cost of a tangible asset over its useful life.

Net Income After Taxes

The profit a company retains after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total revenue.

Operating Costs

Operating costs are expenses associated with the maintenance and administration of a business on a day-to-day basis.