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

question 98

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.
$\begin{array}{|c|c|c|c|c|c|}\hline & \begin{array}{c}\text { Number } \\\text { of } \\\text { Combination }\end{array} & \begin{array}{c}\text { Opportunity Cost } \\\text { of Brushes in } \\\text { Terms } \\\text { of Combs }\end{array} & \begin{array}{c}\text { Number } \\\text { of Combs }\end{array} & \begin{array}{c}\text { Opportunity Cost } \\\text { of Combs in Terms } \\\text { of Brushes }\end{array} \\\hline \mathrm{J} & 0 & & 4 & \\\hline \mathrm{K} & 10 & & 3 & \\\hline \mathrm{L} & 17 & & 2 & \\\hline \mathrm{M} & 21 & & 1 & \\\hline \mathrm{N} & 23 & & 0 & \\\hline\end{array}$
Table $1.3$
Production Possibilities for Brushes and Combs On the basis of your calculations in Table 1.3, what is the opportunity cost of producing at point M rather than point N?

• A) 23 combs.
• B) 21 combs.
• C) 1 brush.
• D) 2 brushes.

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Definitions:

External Financing

Funds raised from outside the business, e.g., through borrowing or issuing equity.

Debt-equity Ratio

The ratio reflecting on the strategic use of shareholders' equity and debt for the purpose of financing assets.

Growth Rate

The rate at which a company's earnings or revenue increases over a specified period, typically expressed as a percentage.

Retained Earnings

The portion of a company's profit that is held back and not paid out as dividends, often used for reinvestment.