HomeQuestionsEconomicsOpportunity Cost and PPC
📚 Learning Guide
Opportunity Cost and PPC
medium

When considering the production of two goods, if a country chooses to produce more of Good A, the _____ of Good B increases, reflecting the trade-off in the production possibilities curve.

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

opportunity cost

B

marginal benefit

C

total cost

D

comparative advantage

Understanding the Answer

Let's break down why this is correct

Answer

When a country decides to produce more of Good A, it must take resources away from producing Good B. This means that the amount of Good B that can be made decreases, which is known as the opportunity cost. The production possibilities curve (PPC) shows this trade-off visually; as you move along the curve to produce more of Good A, you see a reduction in Good B. For example, if a country uses its land and labor to grow more wheat (Good A), it might have to reduce the area used for corn (Good B). This illustrates how choices in production reflect the limited resources available and the need to prioritize one good over another.

Detailed Explanation

When a country makes more of Good A, it has to give up some of Good B. Other options are incorrect because Marginal benefit means the extra satisfaction from one more unit; Total cost is the overall expense of making goods.

Key Concepts

Opportunity Cost
Production Possibilities Curve (PPC)
Resource Allocation
Topic

Opportunity Cost and PPC

Difficulty

medium 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.

Start Learning with SeekhExplore More Opportunity Cost and PPC Questions