The Following Economy Produces Two Products

question 11

Multiple Choice

The following economy produces two products. Refer to the above table.The total opportunity cost of the three units of steel is:

• A) 15 units of wheat.
• B) 20 units of wheat.
• C) 45 units of wheat.
• D) 55 units of wheat. If this economy decides to produce three units of steel,it must give up 45 units of wheat (100 - 55 = 45).

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Definitions:

Marginal Utility

The additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.

Hypothetical Consumer

A theoretical representation of an average consumer used in economic models to predict buying behavior and market dynamics.

Consumer Income

The total earnings of an individual or household from all sources, influencing their purchasing decisions.

Maximum Quantity

The highest amount of a product or resource that can be produced, obtained, or allocated under specific conditions.