According to the Principle of Increasing Opportunity Cost, Expanding Production

question 71

Multiple Choice

According to the principle of increasing opportunity cost, expanding production requires using resources in which order?

• A) In random order.
• B) Starting with the resource with the highest opportunity cost and progressing to the lower opportunity cost resources.
• C) Starting with the resource closest to the average opportunity cost, then progressing to higher opportunity cost resources.
• D) Starting with the resource with the lowest opportunity cost and proceeding to the higher opportunity cost resources.

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Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where the amount sellers are willing to sell equals the amount buyers are willing to buy.

Supply Curve Shift

A change in the position of the supply curve, either to the left or right, indicating a change in the quantity supplied at every price level, due to factors other than price.

Downward-Sloping Demand

The economic principle that, all else being equal, as the price of a good or service decreases, consumer demand for it will increase.

Equilibrium Price

The price at which the quantity of a product offered for sale equals the quantity of the product in demand.