The Fact of Increasing Opportunity Cost When Moving on the PPF

question 32

Multiple Choice

The fact of increasing opportunity cost when moving on the PPF means that

• A) to increase the production of one product requires larger and larger sacrifices of the other good.
• B) to decrease the production of one product requires smaller and smaller sacrifices of the other good.
• C) to increase the production of one product requires smaller and smaller sacrifices of the other good.
• D) when the government forces a movement from one point on the PPF to another point, no production is lost.
• E) the PPF will be a negatively sloped straight line.

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Definitions:

Illusory Correlation

The perception of a relationship between two variables even when no such relationship exists.

Logical Assumption

A premise that is considered reasonable and follows logically from given information.

Self-Serving Bias

The common tendency to attribute positive events to one's own character or actions but attribute negative events to external factors.

Defensive Attribution

A cognitive bias that involves attributing causes to behaviors or events in a way that defends oneself from feelings of vulnerability and mortality.