-In the Above Figure, Which of the Following Is TRUE

question 106

Multiple Choice

-In the above figure, which of the following is TRUE regarding the movements from point A to B and from point C to D? I) The movement from point A to B shows that the economy has chosen to produce 100 more jets.
II) The movement from point C to D shows that the economy has chosen to produce 100 more jets.
III) The movement from point A to B and from point C to D have the same opportunity cost.

• A) I and II
• B) I and III
• C) II and III
• D) I, II and III

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Definitions:

Opportunity Costs

The financial loss associated with overlooking the alternative that is considered second-best when making a choice.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total quantity of output produced.

Competitive Market

A market structure characterized by a large number of sellers and buyers, free entry and exit, and products that are similar enough to be considered substitutes, leading to price competition.

Economic Profit

The difference between a company's total revenue and its total costs, including both explicit and implicit costs, representing the financial gain in excess of opportunity costs.