-The Table Above Lists Six Points on the Production Possibilities

question 38

Multiple Choice

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?

• A) 2 tons of grain per car
• B) 4 tons of grain per car
• C) 0.25 tons of grain per car
• D) 0.5 tons of grain per car

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Definitions:

Net Income

Net income is the ultimate profit a company achieves after subtracting all taxes, expenses, and costs from its total income.

Commercial Substance

A situation where the future cash flows of a business are expected to change significantly as a result of a transaction.

Plant Assets

Long-term tangible assets used in the operation of a business that are not intended for sale.

Recognized Immediately

The principle of recording revenues or expenses in the accounting period when they occur, regardless of when cash is received or paid.