The Highest Valued Alternative That Must Be Given Up in Order

question 46

Multiple Choice

The highest valued alternative that must be given up in order to choose an option is called the:

• A) opportunity cost.
• B) utility cost.
• C) scarcity expense.
• D) disutility option.

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Definitions:

Marginal Revenue Product

The extra revenue generated by employing one additional unit of a resource, such as labor or capital.

Diminishing Marginal Returns

A principle stating that after an optimal point, further increases in one input while holding others constant will result in smaller and smaller gains in output.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a variable input.

Marginal Physical Product

The additional output produced by using one more unit of a variable input, holding all other inputs constant.