Practice Questions
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If a farmer decides to grow corn instead of soybeans, what is the opportunity cost of this decision?
The opportunity cost is what you give up when you make a choice. Other options are incorrect because Some might think the profit from corn is the cost...
When evaluating a decision to attend college versus entering the workforce immediately, which of the following best describes the concept of opportunity cost in terms of marginal benefit and utility?
When you choose college, you miss out on the money you could have earned by working. Other options are incorrect because This answer suggests that tui...
When considering the opportunity cost of attending college, which of the following best represents a choice that could have been made instead?
Choosing to attend college means you miss out on working full-time. Other options are incorrect because Some might think tuition is the main cost, but...
In the context of opportunity costs, which of the following scenarios best illustrates the relationship between marginal cost and explicit costs when a company decides to allocate resources to a new project?
This choice shows that the farmer only thinks about the cost of seeds. Other options are incorrect because This option suggests that investing in mach...
When making a decision to invest in a new business venture, how can understanding opportunity costs help in the trade-off analysis during the cost-benefit evaluation?
Knowing opportunity costs helps you see what you might miss out on if you invest your money elsewhere. Other options are incorrect because Some might ...
If a student decides to spend two hours studying for a test instead of working a part-time job, what is the opportunity cost of studying?
The opportunity cost is what you give up when you make a choice. Other options are incorrect because Some might think the knowledge gained is the cost...
What is the opportunity cost of choosing to spend your savings on a vacation instead of investing it in stocks?
The opportunity cost is what you give up when you make a choice. Other options are incorrect because Some might think the vacation cost is the main lo...
What is the primary reason why opportunity costs arise in economics?
Opportunity costs happen because resources are limited. Other options are incorrect because Some might think inflation causes opportunity costs; Gover...
You have the choice to allocate resources to produce either 10 units of good Y or 12 units of good X. If you decide to produce good X, what is the opportunity cost associated with this decision?
Opportunity cost is what you give up when you make a choice. Other options are incorrect because This answer confuses resources with opportunity cost;...
Arrange the following steps in the correct order to analyze the opportunity costs when moving resources from the production of good Y to good X using a production possibilities curve (PPC): A) Evaluate the potential increase in production of good X, B) Identify the resources currently allocated to good Y, C) Calculate the opportunity cost of producing more of good X, D) Assess the new production point on the PPC.
First, you need to see what resources are used for good Y. Other options are incorrect because This option suggests checking the new production point ...
When evaluating opportunity costs in the context of moving resources from producing good Y to good X, which of the following statements are true? Select all that apply.
Other options are incorrect because This statement is incorrect; This is a common misunderstanding....
If a country decides to produce more of good X, what does this imply about good Y?
When a country makes more of good X, it uses resources that could have made good Y. Other options are incorrect because Some might think that making m...
If a country chooses to produce more of good X, what is the opportunity cost associated with this decision?
When a country makes more of good X, it has to use resources that could have made good Y. Other options are incorrect because This answer confuses tot...
When evaluating the trade-offs between producing good X and good Y, the __________ represents the value of the next best alternative that is sacrificed when making a choice.
Opportunity cost is what you give up when you choose one option over another. Other options are incorrect because Marginal cost is about the extra cos...
A farmer has the choice to allocate his resources to produce either corn or wheat. Currently, he is at point A on his production possibilities curve, producing 50 bushels of corn and 30 bushels of wheat. If he decides to produce more corn, moving to point B where he produces 70 bushels of corn and 10 bushels of wheat, what is the opportunity cost of his decision to produce more corn?
When the farmer increases corn production from 50 to 70 bushels, he gives up 20 bushels of wheat. Other options are incorrect because This answer conf...
If the trade-off between producing good Y and good X is similar to choosing between studying for an exam or going out with friends, what would studying for the exam represent in this analogy?
Studying for the exam means you are giving up time with friends. Other options are incorrect because This answer suggests that studying is the same as...
If a company decides to produce more units of good X at the expense of good Y, what is the underlying reason for this trade-off?
When a company makes more of good X, it has to give up some of good Y. Other options are incorrect because This idea is wrong because resources are li...
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