Tom and Jerry Have Two Tasks to Do All Day

question 54

Multiple Choice

Tom and Jerry have two tasks to do all day: set traps and build bombs.If Tom spends all day setting traps,he will have set 16 traps.If he instead devotes his day to building bombs,Tom will build 4 bombs.If Jerry spends his day setting traps,he will set 14 traps;if he spends the day building bombs,he will build 7 bombs.The opportunity cost of one bomb is _______ for Tom and ________ for Jerry.Therefore Tom should specialize in ______________.

• A)4 traps;2 traps;traps
• B)16 traps;14 traps;traps
• C)4 traps;2 traps;bombs
• D)16 traps;14 traps;bombs

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Definitions:

Capital Expenditures

Capital expenditures refer to funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Plant Asset

Long-term tangible assets that are used in the production of goods or services and are not intended for resale.

Productive

Characterized by achieving significant results or output relative to the input or effort expended.

Total Asset Turnover

A financial ratio that measures the effectiveness of a company in utilizing its assets to generate sales or revenue.