Table 8.5 -Refer to Table 8.5.If Sherry Produces Four Pair of Earrings,her

question 50

Multiple Choice

Table 8.5
-Refer to Table 8.5.If Sherry produces four pair of earrings,her average fixed costs are

• A) $4.
• B) $20.
• C) $25.
• D) $100.

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Definitions:

Opportunity Costs

Making a choice results in the loss of potential profit that could have been earned from choosing differently.

Increasing Opportunity

In economic terms, refers to the increasing cost associated with producing additional units of a good, implying that producing more of one good requires sacrificing increasingly larger amounts of another good.

Production Possibilities

The various combinations of goods and services that can be produced by an economy given its available resources and technology, illustrating potential trade-offs and efficiency.

Comparative Advantage

An economic principle that states a country should produce and export goods for which it is more efficient at producing than other countries, and import goods that it is less efficient at producing.