Table 2-1 Production Possibilities for Toyland

question 211

Multiple Choice

Table 2-1
Production Possibilities for Toyland

-Refer to Table 2-1. What is the opportunity cost to Toyland of increasing the production of dolls from 200 to 300?

• A)200 fire trucks
• B)150 fire trucks
• C)100 fire trucks
• D)It is impossible to tell what the opportunity cost is since in this example costs are not constant.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, often expressed as an annual percentage of the principal.

Interest Payable

The amount of interest expense that has accrued but has not yet been paid by the company.

Accounts Payable

An accounting entry representing an entity's obligation to pay off a short-term debt to its creditors or suppliers.

Notes Payable

A liability on a balance sheet representing promissory notes that a company must pay in the future.