Since It Is a Centrally Planned Economy, China Does Not

question 272

True/False

Since it is a centrally planned economy, China does not face opportunity costs when economic decisions are made.

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Definitions:

Opportunity Costs

The cost of foregone alternatives when a decision is made to pursue a particular course of action over others.

Production Possibilities Frontier

A curve depicting the maximum output combinations of two goods that can be produced given available resources and technology.

Opportunity Cost

The cost of what is foregone in order to pursue a certain action or decision.

Bowed-out

A term often used to describe a production possibility frontier that is concave from the origin, indicating increasing opportunity costs as more of one good is produced.