Table 2.5 Table 2.5 Shows the Output Per Month of Two People

question 191

Multiple Choice

Table 2.5

Table 2.5 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles.
-Refer to Table 2.5. What is Barney's opportunity cost of making a unicycle?

• A)1/2 pogo stick
• B)2 pogo sticks
• C)1.75 unicycles
• D)2.8 pogo sticks

---

Definitions:

Gain

An increase in the value of an investment or asset.

Donor's Adjusted Basis

The value used for tax purposes to determine the gain or loss when property is given as a gift, generally the cost basis of the donor at the time of the gift.

Fair Market Value

The price that property would sell for on the open market, between a willing buyer and a willing seller each having reasonable knowledge of all pertinent facts.

Gift

A transfer of property or assets from one individual to another without the expectation of payment or anything in return.