A Village Has Five Residents,each of Whom Has Accumulated Savings

question 92

Multiple Choice

A village has five residents,each of whom has accumulated savings of $50.Each villager can use the money to buy a government bond that pays 10% interest per year or to buy a year-old goat,send it onto the commons to graze,and sell it after one year.The price of the goat that the villager will get at the end of the year depends on the amount of weight it gains while grazing on the commons,which in turn depends on the number of goats sent onto the commons,as shown in table below. $$\begin{array} { c c c } \begin{array} { c } \text { Number of goats } \\\text { on the commons }\end{array} & \begin{array} { c } \text { Price per 2-year-old } \\\text { goat (\$) }\end{array} & \begin{array} { c } \text { Income per goat } \\\text { (\$/year) }\end{array} \\1 & 80 & 30 \\2 & 75 & 25 \\3 & 70 & 20 \\4 & 65 & 15 \\5 & 55 & 5\end{array}$$
Refer to the information given above.The villagers will buy a year-old goat if that goat can be sold for a price of at least _____ when it is a 2-year-old.

• A)$55
• B)$75
• C)$70
• D)$65

Grasp the significance of comparing financial metrics (e.g., return on assets vs. return on equity) and what these comparisons reveal about financial strategies and performance.

Understand the concept and significance of the relevant range of operations.

Differentiate between fixed, variable, and mixed costs in relation to production volume.

Grasp the mechanics and implications of cost behavior on per unit and total cost basis.