The Concept of Opportunity Cost in a Fully Employed Economy

question 184

Multiple Choice

The concept of opportunity cost in a fully employed economy with technology and resources held constant tells us that

• A)expansion of output in one industry means expansion cannot occur in another industry.
• B)expansion of output in one industry means output in another industry must contract.
• C)output cannot be increased in any industry.
• D)output of all industries must contract until more resources are found.

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Definitions:

Bull's-Eye

The center of a target, often used metaphorically to indicate a perfect or precise achievement.

Independent

Not influenced or controlled by others, often used to describe variables in experiments that are manipulated to observe effects on dependent variables.

First Serve

In tennis or related sports, the initial serve in a point, where the server has two opportunities to make a successful serve.

Probability

A numerical expression, ranging between 0 and 1, used to indicate how probable it is that a given event will happen, where 0 means the event is impossible, and 1 means the event is certain to happen.