The Opportunity Cost of Making a Component Part in a Factory

question 72

Multiple Choice

The opportunity cost of making a component part in a factory with no excess capacity is the:

• A)variable manufacturing cost of the component.
• B)fixed manufacturing cost of the component.
• C)total manufacturing cost of the component.
• D)net benefit foregone from the best alternative use of the capacity required.

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Definitions:

Normal Good

A good whose demand increases as the income of consumers increases, and vice versa.

Normal Good

A type of good for which demand increases as the income of consumers increase, demonstrating a positive correlation between income and demand.

Inferior Good

A type of product whose demand decreases when the income of consumers increases, inverse to normal goods.

Income Increased

A scenario where an individual's or entity's earnings rise, affecting their purchasing power and economic well-being.