Which of the Following Is an Illustration of the Law

question 10

Multiple Choice

Which of the following is an illustration of the law of increasing opportunity costs?

• A) As more cars are produced,the opportunity cost of each additional car is greater than for the preceding unit.
• B) As more cars are produced,the opportunity cost of each additional car is less than for the preceding unit.
• C) As more cars are produced,the opportunity cost of each additional car is the same as for the preceding unit.
• D) People pay lower prices for cars the higher the costs of producing cars.

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Definitions:

Lead Time

The timeframe between the initiation and completion of a process, such as from placing an order to its delivery.

Re-Order Point

The inventory level at which an order should be placed to replenish stock before it runs out, based on lead time and consumption rate.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices at a given time.

Optimal Order Size

The quantity that minimizes the total cost of inventory, including holding and ordering costs.