Based on the Data in the Above Table, Then If

question 91

Multiple Choice

Based on the data in the above table, then if opportunity costs are constant, the opportunity cost of producing one cuckoo clock in the United States is ________, and the opportunity cost of producing one cuckoo clock in Switzerland is ________.

• A) 3 movies; 1.33 cuckoo clocks
• B) 0.33 movies; 0.67 cuckoo clocks
• C) 0.67 movie; 1.5 movies
• D) 1.5 movies; 0.67 movie

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Definitions:

Explicit Costs

Directly incurred expenses in the operation of a business, such as wages, rent, and material costs, which are clearly accounted for and easy to identify.

Opportunity Costs

The potential benefits missed out on when choosing one alternative over another.

Explicit Costs

Direct, out-of-pocket payments for goods or services that are made by a business as part of its operations.

Total Economic Costs

The sum of all costs associated with the production of a good or service, including both explicit (direct) costs and implicit (indirect or opportunity) costs.