Using Figure 35

question 90

Multiple Choice

Using Figure 35.2, the opportunity cost of producing 1 pair of golf shoes in the United States is

• A)Less than the opportunity cost in Mexico.
• B)2 baseballs.
• C)1/3 of a baseball.
• D)3 baseballs.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent and salaries.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.

Breakeven Volume

The quantity of products sold or services rendered at which total revenues equal total costs, resulting in no net loss or gain.

Sales Revenues

The income earned by a company from its sales of goods or the provision of services before any costs or expenses are deducted.