John's Budget Is Such That He Can Afford Either a Computer

question 132

Multiple Choice

John's budget is such that he can afford either a computer or a Caribbean vacation,both of which cost the same.Which of the following statements about his opportunity cost is correct?

• A)The opportunity cost of a Caribbean vacation is the money John pays for the vacation.
• B)The opportunity cost of the vacation is the same as the opportunity cost of the computer because John can afford only one or the other.
• C)There is nothing to say about the opportunity cost because we don't know how much the computer or the Caribbean vacation costs.
• D)The opportunity cost of going on a vacation is the loss from not being able to buy the computer.
• E)The opportunity cost of the computer is the total cost of the computer and the Caribbean vacation.

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Definitions:

Year-End Equity

refers to the total value of an owner's interest in a company at the end of a financial year, calculated as assets minus liabilities.

Total Assets

The sum of all resources owned by a company, valued in terms of monetary units, which includes both current and non-current assets.

Traditional Balance Sheet

A financial statement that provides a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and equity.

Corporate Tax Schedule

A corporate tax schedule is a chart or system that determines the tax rate applied to a corporation's taxable income.