Learning Path
Question & Answer1
Understand Question2
Review Options3
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Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
Let's break down why this is correct
Answer
Opportunity cost is what you give up when you choose to produce one good over another. When we say that increasing the production of one good results in a constant opportunity cost, it means that for every additional unit of that good produced, the amount of the other good you have to give up stays the same. This idea is often illustrated using a Production Possibility Curve (PPC), which shows the trade-offs between two goods. For example, if a factory can produce either 10 cars or 30 bikes, and it decides to make one more car, it might have to give up making 3 bikes every time, regardless of how many cars or bikes it has already produced. However, in real life, opportunity costs can change as resources are not always equally good for producing both goods, leading to increasing opportunity costs as production shifts.
Detailed Explanation
This statement is false. Other options are incorrect because Many think that opportunity cost stays the same.
Key Concepts
Opportunity Cost
Production Possibilities Curve (PPC)
Resource Allocation
Topic
Opportunity Cost and PPC
Difficulty
medium level question
Cognitive Level
understand
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