If the Price of Good X Is $50 and the Price

question 51

Multiple Choice

If the price of good X is $50 and the price of good Y is $25,it follows that the relative price of one unit of good X is _____________ unit(s) of good Y.

• A)1.00
• B)2.00
• C)0.75
• D)1.33
• E)0.50

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Definitions:

NPV

Net Present Value; a calculation used to determine the value of an investment by considering the present value of its expected future cash flows minus the initial investment cost.

Contribution Margin

The amount by which a product's sales price exceeds its total variable costs, indicating how much contribution the product makes towards fixed costs and profits.

Variable Cost

Costs that vary directly with the level of output or production activity, such as raw materials or hourly labor.

Cash Break-even

The point at which a company does not make a profit or loss from operations, calculated by covering all cash operating expenses with the revenue generated.