Table 2-2 Production Possibilities for Batterland

question 447

Multiple Choice

Table 2-2
Production Possibilities for Batterland

-Refer to Table 2-2.What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?

• A) 75 waffles
• B) 150 waffles
• C) 250 waffles
• D) 325 waffles

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Definitions:

Explicit Costs

Direct, out-of-pocket expenses incurred in the operation of a business, such as wages, rent, and materials.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources it already owns, without having to pay rent or purchase them.

Capital

Economic resource that is used in the production of goods and services. It includes tools, buildings, machinery, and equipment.

Either-Or Decision

A decision-making process that involves choosing between two mutually exclusive options or paths.