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.Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of BrushesOpportunity Cost of Brushes in Terms of CombsNumber of CombsOpportunity Cost of Combs in Terms of BrushesJ0 4 K10 3 L17 2 M21 1 N23 0 Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of combsOpportunity Cost(Foregone brushes)Number of brushesOpportunity Cost (Foregone combs)J4 0NAK3 10 L2 17 M1 21 N0NA23 On the basis of Table 1.3, what is the opportunity cost of producing at point M rather than point N?
A. 1 brush.
B. 23 combs.
C. 21 combs.
D. 2 brushes.
Answer: D
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If the quantity of capital per worker in the economy increases
A) the amount of money held by workers increases. B) labor productivity increases. C) the stock of human capital necessarily increases. D) the stock of financial assets held by the public increases.
The imposition of a binding price floor on a market causes quantity demanded to be a. greater than quantity supplied. b. less than quantity supplied
c. equal to quantity supplied. d. Both (a) and (b) are possible.
When the decrease in the price of one good causes the demand for another good to decrease, the goods are
A. substitutes. B. complements. C. normal. D. inferior.
Suppose Marquette Bank and Trust has $10 million in total deposits and the required reserve ratio is 7%. How many dollars must the bank keep in its vaults or on deposit at a Federal Reserve Bank?
A) $9.3 million B) $7 million C) $930,000 D) $700,000 E) None of the above—it's the bank's own choice.