There Are Two Explanations of Constant Opportunity Costs: (1) Factors

question 149

True/False

There are two explanations of constant opportunity costs: (1) factors of production are imperfect substitutes for each other; (2) all units of a given factor have different qualities.

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Definitions:

Working Capital

The balance sheet accounts associated with day-to-day operating activities. Gross working capital is generally defined as current assets and net working capital as current assets minus current liabilities.

Accounts Receivable

Money owed to a company by its customers for goods or services already delivered but not yet paid for.

Inventory

Represents the goods or materials a business holds for the purpose of resale or production.

Interest Expense

The cost incurred by an entity for borrowed funds, which can include the cost of bonds, loans, or lines of credit.