Table 2-5 Table 2-5 Shows the Output Per Month of Month

question 104

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 Fred's opportunity cost of making a unicycle?

• A) 1/3 of a pogo stick
• B) 3 pogo sticks
• C) 1/2 of a unicycle
• D) 1.3 pogo sticks

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Definitions:

Interest Revenue

Earnings received from lending activities or from investments in interest-bearing assets.

Operating Lease

A lease agreement allowing a user to rent an asset without the benefits or responsibilities of ownership, typically with shorter lease terms.

Debt to Stockholders' Equity

A financial ratio that measures the company's financial leverage by comparing its total liabilities to stockholders' equity.

Capital Lease

A lease treated like a purchase by the lessee in accounting, meaning the leased asset is included on the balance sheet, and the corresponding lease obligation is treated as a liability.