Exhibit 29-1 -According to the Data in Exhibit 29-1, the Opportunity Cost

question 193

Multiple Choice

Exhibit 29-1
-According to the data in Exhibit 29-1, the opportunity cost of producing one more unit of good A in India is

• A)1/2 unit of good B.
• B)1/3 unit of good B.
• C)3 units of good B.
• D)2 units of good B.
• E)5 units of good B.

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Definitions:

Transaction Balances

Cash kept on hand by a firm to pay normal daily expenses, such as employee wages and bills for supplies and utilities.

Marketable Securities

Temporary investment of “extra” cash by organizations for up to one year in U.S. Treasury bills, certificates of deposit, commercial paper, or Eurodollar loans.

Retained Earnings

Earnings after expenses and taxes that are reinvested in the assets of the firm and belong to the owners in the form of equity.