Skill: Definition 12) The reason that opportunity costs arise is that If there appears to be only one option presented in the decision-making process, the default alternative is laissez-faire (to do nothing) with an associated cost of zero. 2-84 We have to forgo something in order to satisfy a want. B) the additional cost of producing an additional unit of output. inflation and unemployment. C. an economy relies on money to facilitate exchange of goods and services. B. there are no alternative decisions that could be made. Agency costs are a type of internal cost that arises from, or must be paid to, an agent acting on behalf of a principal. an economy's capacity to produce increases in proportion to its population size. Chapter 1 - The reason that opportunity costs arise is that. C) there are no alternative decisions that could be made. a. resource scarcity. Which of the following will shift an economy's production possibilities curve outward? Which of the following is not a factor of production? movement down along the curve if consumer goods are represented on the vertical axis and, movement up along the curve if consumer goods are represented on the vertical axis and. AACSB: Reflective Thinking Bloom's: Remember Difficulty: Medium Learning Objective: 02-04 Explain and apply the concept of opportunity cost. B)there are no alternative decisions that could be made. C) there are no alternative decisions that could be made. B) resources are scarce. b) resources are scarce. 52. D) the additional cost of buying an additional unit of a product. Assume that you value Hot … This is one of the reasons Arise gets a bad reputation — they charge for their training. (b) As the production of a good increases, the opportunity cost of that good falls. (a) Total (c) Marginal (d) Allocative (b) Sunk Scarcity Is The Reason Opportunity Costs Arise. 57. One scarce resource that constrains our behavior is time. But in most work-for-yourself settings — which this is … The economy's labor force is fully employed. That's a real opportunity cost, but it's hard to quantify with a dollar figure, so it doesn't fit cleanly into the opportunity cost equation. AACSB: Reflective Thinking Bloom's: Remember Difficulty: Medium Learning Objective: 02-04 Explain and apply the concept of opportunity cost. If an economy begins to use its resources more efficiently, it will move D)resources are scarce. Which of the following would an economist classify as capital? In microeconomic theory, opportunity cost, or alternative cost, is the loss of potential gain from other alternatives when one particular alternative is chosen over the others. Answer: A Diff: 2 Topic: Why Study Economics? 9) The reason that opportunity costs arise is that A) an economy relies on money to facilitate exchange of goods and services. To determine. x-there is no alternative decisions that could be made. 57. Because resources are scarce, the opportunity cost of investment in capital is forgone present consumption. For reasons we’ll see, it’s going to be much more useful in our economic thinking to think of the value of the opportunity foregone rather than as the opportunity itself. x-people have limited wants. if someone has a comparative advantage in growing pineapples. We’ll get to that. infographics! (a) As the production of a good increases, the opportunity cost of that good rises. Find answers and explanations to over 1.2 million textbook exercises. The reason that opportunity costs arise is that A)people have unlimited wants. Learning Objective: 02-05 Describe and distinguish among the concepts of full employment; full production; and underemployment. 9. check_circle. Course Hero is not sponsored or endorsed by any college or university. 54. Learn more about The Wealth of Nations with Course Hero's FREE study guides and Learning Objective: 02-09 Identify and explain the factors which enable an economy to grow. Opportunity Cost. Learning Objective: 02-03 Name the four economic resources and explain how they are used by the entrepreneur. 58. b. lack of alternatives. The existence of unemployment can be illustrated on a production possibilities curve by. Opportunity cost is a component of the collective concept of economic cost. Learn more about The Wealth of Nations with Course Hero's FREE study guides and The study of economics. (d) The economy is not at full employment when operating on the PPF. If resources are used inefficiently in the. This occurs because the producer reallocates resources to make that product. the economy will be operating at a point on its production possibilities curve. The reason that opportunity costs arise is that A. people have unlimited wants. Let’s explain the same with the help of an example: Costa Rica a developing nation holds a National debt of $3000 billion and requires paying an interest bill on the national debt that amounts to$340 billion annually. 56. it will be possible to produce more pizzas without decreasing the production of jeans. Course Hero is not sponsored or endorsed by any college or university. The law of increasing opportunity cost states that when a company continues raising production its opportunity cost increases. that in order to acquire more of one good, none of the alternative good must be given up. The reason that opportunity costs arise is that A. people have unlimited wants. B. there are no alternative decisions that could be made. The biggest opportunity cost regarding liquidity has to do with the chance that you could miss out on a prime investment opportunity in the future because you can't get your hands on your money that's tied up in another investment. It is also known as ‘the next best alternative’. If our economy was operating at point O (where the two axes come together), we would. If we decide and choose which want to satisfy with the available resource, then there are other wants we have to leave unsatisfied. C) there are no alternative decisions that could be made. This preview shows page 84 - 87 out of 164 pages. c- marginal cost. 2-84 Question: Regardless Of What I Do In The Future, I Cannot Avoid ----- Costs Because I Have Already Incurred Them. c. limited wants. c-resources are scarce. d. abundance of resources. it will not be possible to produce more jeans or pizzas. The opportunity cost of selling any resource is the explicit cost for the buyer. O C. Because people's wants are unlimited but resources are scarce, choices must be made between alternative uses for the resources. Learning Objective: 02-06 Describe the concept of the production possibilities curve and how it is used. x-an economy relies on money to facilitate exchange of goods and services. Choice arises in economics because we cannot get everything that we want, and there is not enough of what we want to be had. 10) The reason that opportunity costs arise is that: a) people have unlimited wants. B) resources are scarce. The production possibilities curve tells us that if full employment exists and a nation, wishes to permanently increase its production of military goods, it must. C)an economy relies on money to facilitate exchange of goods and services. EconsT1/MBA/NCK D. resources are scarce. The opportunity cost of any activity is the explicit cost … (c) Opportunity costs are constant. D)resources are scarce. Even free natural … The reason for an increasing opportunity cost PPF is: A. resources are not all identical B. constant technology C. scarcity D. fixed supply of money; 1. Products are produced using inefficient production technology. In numerical terms, the opportunity cost value is nothing but the difference between the cost of the desired alternative and the cost of the next best alternative. infographics! various combinations of guns and butter that can be produced under conditions of 6, 60. dictate that opportunity costs arise in the presence of a choice. A small economy produces only pizzas and jeans. Expert Solution. have an unemployment rate of ______ percent. 3) The reason that opportunity costs arise is that 3) A) an economy relies on money to facilitate exchange of goods and services. Imagine that you have $150 to see a concert. d) an economy relies on money to facilitate exchange of goods and services. Test Bank for Macroeconomics 10th Edition Slavin, Test Bank for Economics 10th Edition Slavin.doc, Test Bank for Principles of Economics 5th Edition Frank, Florida Institute of Technology • BUS 1301, New Jersey Institute Of Technology • ECE 644, University of California, Davis • DSFS SDF, Test Bank for Microeconomics 19th Edition McConnell, Solution Manual for Economics 10th Edition Slavin.doc, Test Bank for Operations Management 11th Edition Stevenson, University of California, Davis • ECONOMICS 10, New Jersey Institute Of Technology • MANAGEMENT 11. Specifically, if it raises production of one product, the opportunity cost of making the next unit rises. they can grown pineapples at a lower opportunity cost than other pineapple growers. 55. The reason that opportunity costs arise is that A) an economy relies on money to facilitate exchange of goods and services. an economy relies on money to facilitate exchange of goods and services. 52. also increase its production of nonmilitary goods. Try our expert-verified textbook solutions with step-by-step explanations. The reason for arising opportunity costs. Opportunity costs arise due to. Answer: B 10) Which of the following is not an opportunity cost of attending college? The capacity utilization rate is less than full production. Since we have only 24 hours in a day, we must allocate our time in a given day among competing alternatives. Here's why it's important to you. Which of the following will shift an economy's production possibilities curve outward? B)there are no alternative decisions that could be made. Test Bank for Economics 10th Edition Slavin, Test Bank for Macroeconomics 10th Edition Slavin, Test Bank for Economics 10th Edition Slavin.doc, New Jersey Institute Of Technology • ECONOMICS 10, New Jersey Institute Of Technology • ECE 644, Florida Institute of Technology • BUS 1301, University of California, Davis • DSFS SDF. 52 The reason that opportunity costs arise is that A people have unlimited, 10 out of 12 people found this document helpful, 52. x-economic loss. The Cost of Something Mankiw's Ten Principles of Economics Opportunity cost is the value of the next best alternative in a decision. If an economy is operating on its production possibility frontier, which of the following. there are no alternative decisions that could be made. Favourite answer. In the words of Prof. Byrns and Stone “opportunity cost is the value of the best alternative surrendered when a choice is made.” In the words of John A. Perrow “opportunity cost is the amount of the next best produce that must be given up (using the same resources) in … 57 Which of the following will shift an economys production possibilities curve, 18 out of 20 people found this document helpful. Scarcity is the foundation of the essential problem of economics: the allocation of limited means to fulfill unlimited wants and needs. 1 decade ago. As we decide to choose more units of anything, the opportunity cost of each additional unit will rise. The reason that opportunity costs arise is that A)people have unlimited wants. A fall in the price of an input will enable the economy to produce outside the production. C) the additional cost of producing an additional unit of output. Answer: (c) Question 9. The period in England during the late eighteenth and early nineteenth centuries in which a new manufacturing technologies and improved transportation gave rise to the modern factory system and a massive movement of the population … Read ahead to know how you can use these two values to arrive at the opportunity cost figure. This preview shows page 86 - 89 out of 164 pages. Find answers and explanations to over 1.2 million textbook exercises. Skill: Definition 12) The reason that opportunity costs arise is that A) an economy relies on money to facilitate exchange of goods and services. The production possibilities curve illustrates the basic principle that. C)an economy relies on money to facilitate exchange of goods and services. Opportunity cost examples can also be looked from the point of view of a tradeoff as well between the choices foregone for the choice availed. point below or inside the surface of the curve. Economists use the term Next main point with respect to opportunity cost is that actions have costs. The reason that opportunity costs arise is that. Learning Objective: 02-09 Identify and explain the factors which enable an economy to grow. A production possibilities curve shows. C. an economy relies on money to facilitate exchange of goods and services. Opportunity costs arise because resources are scarce. The reason that opportunity costs arise is that. 61. D) the additional cost of buying an additional unit of a product. The process of analyzing the additions or incremental costs or benefits arising from a choice or decision. 53. Here are some reasons you should think twice before jumping in: Training costs money. resources are scarce. is a way of analyzing decision-making processes caused by scarcity. 59. that any amount of goods could be produced by society if people worked harder. Opportunity cost refers to the given up benefits in the process of obtaining some other benefits. The reason that opportunity costs arise is that. the economy will be operating at a point outside its production possibilities curve. D) people have limited wants E) all of the above are true 10. D. resources are scarce. D) people have limited wants. B) resources are scarce. You can either see "Hot Stuff" or you can see "Good Times Band." c) there are no alternative decisions that could be made. Opportunity cost can be defined as weighing the sacrifice made against the gain achieved when making tough money, career, and lifestyle decisions. The want that is forgone is called the ‘opportunity cost’. Since resources are limited, every time you make a choice about how to use them, you are also choosing to forego other options. that in order to acquire more of one good, some of the alternative good must be given up. … Arise most definitely isn’t for everyone. are a focus of positive macroeconomics. if all the resources of an economy are in use, more of one good can be produced only if, an economy will automatically seek that level of output at which all of its resources are, the production of more of any one good will in time require smaller and smaller sacrifices. resources are scarce. Explanation of Solution. Learning Objective: 02-06 Describe the concept of the production possibilities curve and how it is used. Try our expert-verified textbook solutions with step-by-step explanations. C) a cost that cannot be avoided, regardless of what is done in the future. Learning Objective: 02-04 Explain and apply the concept of opportunity cost. 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