To Find the Opportunity Cost of Producing One More Unit

question 155

Multiple Choice

To find the opportunity cost of producing one more unit of any product while on the production possibilities frontier requires

• A)setting the change in one product equal to the change in the other product.
• B)dividing the amount of the product forgone by the amount of the product gained.
• C)setting the amounts of the two products equal to each other.
• D)subtracting the change in the product whose production increased from the change in the product whose production decreased.
• E)None of these describe how to find opportunity cost.

---

Definitions:

Bonds

Long-term debt securities issued by corporations, municipalities, or governments that pay periodic interest payments to investors.

Fair Value

A measure of the estimated price at which an asset could be bought or sold or a liability settled, under current market conditions.

Passive Investments

Investments in which the investor does not actively manage or influence the operation of the asset, such as stocks or mutual funds.

Equity Securities

Financial instruments representing ownership interest in a company, such as stocks, which can yield dividends and capital gains.