The production possibilities table below shows the hypothetical relationship between the production of food and clothing in an economy.
(a) What is the marginal opportunity cost of producing the second unit of clothing?
(b) What is the total opportunity cost of producing two units of clothing?
(c) What is the marginal opportunity cost of producing the third unit of clothing?
(d) What is the total opportunity cost of producing three units of clothing?
Definitions:
Social Benefit
The total advantage or positive impact on society from an action or policy, including both direct effects and externalities.
Social Cost
Represents the total cost of an action or decision, including both the private costs borne by individuals directly involved and external costs to society as a whole.
Measles Vaccines
Medical injections that provide immunity against the measles virus, preventing measles disease.
External Benefits
Positive effects enjoyed by a third party when an economic transaction takes place, without them paying for the benefits received.
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