📚 Learning Guide
Analyzing Opportunity Costs
hard

If a country decides to produce more of good X by reallocating resources from good Y, the opportunity cost is solely determined by the quantity of good Y that is no longer produced, without considering the potential alternatives for those resources.

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

True

B

False

Understanding the Answer

Let's break down why this is correct

Answer

When a country decides to produce more of good X instead of good Y, it has to take resources like labor and materials away from making good Y. The opportunity cost is the amount of good Y that is lost because those resources are now focused on good X. This means that the country must consider how much less of good Y they can produce when they shift their efforts. For example, if a factory that makes bicycles (good Y) is converted to make cars (good X), the opportunity cost is the number of bicycles that will not be produced. However, it's important to remember that opportunity cost also includes what else those resources could have been used for, not just the lost production of good Y.

Detailed Explanation

Opportunity cost is more than just what is lost. Other options are incorrect because This answer misses the bigger picture.

Key Concepts

Opportunity Cost
Resource Allocation
Production Possibilities Curve
Topic

Analyzing Opportunity Costs

Difficulty

hard level question

Cognitive Level

understand

Ready to Master More Topics?

Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.