ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It suggests that the use of resources to produce a set of goods and services means that as more of one is produced, more of the other must be sacrificed.
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It suggests that unlimited wants can be fulfilled.
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It is irrelevant in the production possibilities curve.
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It means that resources are plentiful and opportunities to produce greater amounts of goods and services are unlimited.
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It is unimportant in command economies because of central planning.
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Detailed explanation-1: -The law of increasing opportunity cost is the concept that as you continue to increase production of one good, the opportunity cost of producing that next unit increases. This comes about as you reallocate resources to produce one good that was better suited to produce the original good.
Detailed explanation-2: -The idea behind opportunity cost is that the cost of one item is the lost opportunity to do or consume something else; in short, opportunity cost is the value of the next best alternative.
Detailed explanation-3: -Opportunity Cost = Return on Most Profitable Investment Choice-Return on Investment Chosen to Pursue. Opportunity Cost = $80, 000 (selling ten cars worth $8, 000 each)-$60, 000 (selling 5 trucks worth $12, 000 each) Opportunity Cost = $20, 000.
Detailed explanation-4: -Answer and Explanation: The correct answer is B) In a world of efficiently used scarce resources, more of one good necessarily means less of some other goods.