A Test Is Scheduled for Monday Morning,and You Went to a Party

question 33

Multiple Choice

A test is scheduled for Monday morning,and you went to a party on Sunday night.If you hadn't attended the party,you could have studied for the test or gone to a movie.Which of the following is true regarding your opportunity cost?

• A)The opportunity cost of going to the movie is studying for the test.
• B)The opportunity cost of going to the party is watching the movie.
• C)The opportunity cost of going to the party is both watching the movie and the study time.
• D)Because you could go to the party only that night,but could go to a movie any time,the opportunity cost of the party is the study time.
• E)From the above information,it's not possible to determine the opportunity cost of attending the party.

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Definitions:

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies, where the investment is recorded at original cost and adjusted to reflect the investee's changes in net assets.

Dividends

Payments made by a corporation to its shareholder members, typically from profits or retained earnings, and often in the form of cash or stock.

Income

The financial gain earned or received by an entity within a specified timeframe, typically a result of employment, investments, or business operations.

Intra-entity Gross Profit

The profit made from transactions between divisions or units within the same company before external sales.