The Principle of Increasing Opportunity Costs Implies That

question 44

Multiple Choice

The Principle of Increasing Opportunity Costs implies that:

• A) productive people do the hardest tasks first, while they are fresh.
• B) to increase production, you should use the resources with the lowest opportunity cost first.
• C) the cost-benefit principle does not apply to increasing productivity.
• D) specialization increases productivity.

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Definitions:

Financial Risk

Financial risk involves the possibility that a company's cash flow will not be sufficient to meet its obligations, which can result from volatility in the markets, business operations, or creditworthiness.

Commodity Swap

A financial agreement where two parties exchange cash flows related to a specific commodity's price.

Short-Term Price Movements

Fluctuations in the price of securities that occur within a brief period, often influenced by market sentiment and news.

Swap Contract

An agreement between two parties to exchange sequences of cash flows over a set period of time, generally used to exchange different types of interest rates or currencies.