Assume a Society Can Produce Either Olives or Grapes

question 191

Multiple Choice

Assume a society can produce either olives or grapes. If the marginal rate of transformation of bushels of olives into bushels of grapes is 0.2, then the opportunity cost of olives is

• A) the 5 bushels of olives that must be forgone.
• B) the 5 bushels of grapes that must be forgone.
• C) the 0.2 bushels of olives that must be forgone.
• D) the additional 0.2 gallons of olives that can be produced.

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Definitions:

Journal Entries

The records that document every financial transaction in the accounting system in chronological order.

Job Cost Sheets

A document or record that tracks all the costs associated with a specific job or project, including materials, labor, and overhead costs.

Indirect Materials

Materials used in the production process that are not directly traceable to the final product, such as lubricants and cleaning supplies for machinery.

Indirect Labor

Labor costs associated with the production process that cannot be directly traced to specific products or services, such as maintenance or supervision.