In Movement Along a Production Possibility Frontier,the Opportunity Cost to Society

question 133

Multiple Choice

In movement along a production possibility frontier,the opportunity cost to society of getting more of one good:

• A)is always constant.
• B)is measured in dollar terms.
• C)is measured by the amount of the other good that must be given up.
• D)usually decreases.

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Definitions:

Constant Costs

Costs that do not change with the level of output or production, remaining stable irrespective of business activity levels.

Economic Profit

The profit or loss that a company makes, calculated by subtracting both the explicit and implicit costs from total revenues.

MR Curve

The Marginal Revenue curve represents the change in total revenue that results from selling one additional unit of a good or service.

Opportunity Costs

The value of the best alternative forgone when a decision is made to pursue a certain action.