If the Opportunity Cost of Producing a Ton of Coffee

question 3

Multiple Choice

If the opportunity cost of producing a ton of coffee in the U.S. is sixteen tons of rice, while the opportunity cost of producing a ton of coffee in Costa Rica is four tons of rice, the U.S. and Costa Rica could both benefit from specialization and trade if the terms of trade (measured in tons of rice delivered per ton of coffee received) were any number between

• A)one and four.
• B)one and sixteen.
• C)four and sixteen.
• D)eight and sixteen.

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Definitions:

Expenses

Costs incurred during the operation of a business, such as rent, salaries, and utilities, required for generating revenue.

Revenue

The overall earnings accrued from transactions involving goods or services at the heart of a business's primary operations.

Retrospective Approach

The retrospective approach involves revising previously issued financial statements to reflect changes in accounting policy as if the new policy had always been in effect.

Change In Accounting Principle

An adjustment made to the accounting methods used by a company, requiring retrospective restatement of prior financial statements to reflect the new principle.