If There Is Increasing Opportunity Cost,then,when Moving Downward on a Production

question 116

Multiple Choice

If there is increasing opportunity cost,then,when moving downward on a production possibilities frontier,the opportunity cost of the good on the horizontal axis ________ as more of the good is produced.

• A)decreases and the PPF gets flatter
• B)does not change and the PPF gets steeper
• C)decreases and the PPF gets steeper
• D)increases and the PPF gets flatter
• E)increases and the PPF gets steeper

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Definitions:

Compensation Cost

The total amount an employer spends on an employee's salary, benefits, and other forms of remuneration.

Average Cost

The total cost of production divided by the number of units produced.

Hidden-cost Fallacy

This fallacy occurs when not all costs associated with a decision or action are considered, leading to an underestimation of the true cost.

Overhead

The ongoing administrative, operational, or general business expenses that are not directly tied to the production of goods or services.