Japan Must Give Up the Production of 75 Computers to Produce

question 182

Multiple Choice

Japan must give up the production of 75 computers to produce 25 additional cellular telephones.The opportunity cost of producing 3 computers is _____ cell phone(s) .

• A)1
• B)3
• C)22
• D)28

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Definitions:

Optimal Factor Choice

A decision-making process in which a firm determines the most efficient combination of factors of production (labor, capital, etc.) to maximize output or minimize costs.

Weak Axiom of Cost Minimization (WACM)

An economic principle stating that if a set of goods is chosen over another set at the same prices, then the chosen set should not cost more than the other when prices change.

Input Bundle

A combination of resources or inputs used in the production of goods and services.

Unit Costs

The cost incurred by a company to produce, store, and sell one unit of a particular product or service.