Table 13 Shows the Hypothetical Trade-Off Between Different Combinations of Brushes

question 18

Multiple Choice

Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X,ceteris paribus.Complete the table by calculating the required opportunity costs for brushes and combs. $\begin{array}{|c|c|c|c|c|c|}\hline \text { Combination } & \begin{array}{c}\text { Number } \\\text { of } \\\text { Brushes }\end{array} & \begin{array}{c}\text { Opportunity Cost } \\\text { of Brushes in } \\\text { Terms } \\\text { of Combs }\end{array} & \begin{array}{c}\text { Number } \\\text { of Combs }\end{array} & \begin{array}{c}\text { Opportunity Cost } \\\text { of Combs in Terms } \\\text { of Brushes }\end{array} \\\hline \text { J } & 0 & & 4 \\\hline \mathrm{K} & 10 & & 3 \\\hline \mathrm{L} & 17 & & 2 \\\hline \mathrm{M} & 21 & & 1 \\\hline \mathrm{N} & 23 & & 0 \\\hline\end{array}$

Table 1.3
Production Possibilities for Brushes and Combs On the basis of your calculations in Table 1.3,in the production range of 1 to 2 combs the opportunity cost of producing 1 more comb in terms of brushes is

• A)4.
• B)1/2.
• C)2/17.
• D)1/7.

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Definitions:

Gross Investment

The total amount of capital expenditure a company spends on maintaining and increasing the scope of its operations.

Net Investment

The total spending on new fixed investment minus depreciation on existing physical assets.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value due to use, wear and tear, or obsolescence.

Disposable Income

The net income available to an individual or household for saving or spending after income taxes have been deducted.