Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Opportunity cost increases as production shifts from one good to another on the PPC.
B
The PPC illustrates that all resources are perfectly adaptable for producing any good.
C
The concept of opportunity cost helps in understanding the trade-offs between different goods represented on the PPC.
D
A point inside the PPC indicates that resources are being used efficiently.
E
The shape of the PPC can indicate increasing opportunity costs when moving along the curve.
Understanding the Answer
Let's break down why this is correct
Answer
Opportunity cost is the value of the next best alternative that you give up when making a choice. For example, if you decide to spend your time studying instead of going out with friends, the opportunity cost is the fun and social time you miss. The Production Possibilities Curve (PPC) is a visual tool that shows the maximum combinations of two goods or services that can be produced with limited resources. When you move along the PPC, the opportunity cost becomes clear because increasing the production of one good means you have to reduce the production of another good. This relationship helps to illustrate how choices involve trade-offs and the sacrifices we make when we allocate our resources.
Detailed Explanation
All the statements provided misunderstand key ideas about opportunity cost and the PPC. Other options are incorrect because This option suggests that opportunity cost always increases, but it can vary; This statement is incorrect because resources are not always perfectly adaptable.
Key Concepts
Opportunity Cost
Production Possibilities Curve (PPC)
Resource Allocation
Topic
Opportunity Cost and PPC
Difficulty
easy level question
Cognitive Level
understand
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