If an economy moves from producing 10 units of A and 4 units of B to producing 7 As and 5Bs The opportunity cost of the 5th B is ?
Correct answer: C. 3As
- A. 7As
- B. 10As
- C. 3As
- D. 1A
Explanation
Increasing B from 4 to 5 requires reducing A from 10 to 7, so the opportunity cost of the fifth B is 3 units of A. Opportunity cost is the output of the next-best alternative forgone.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
The resources in the economy do not include ?
Any combination of products inside the production possibility frontier is ?
According the law of diminishing returns ?
As resources are shifted from one industry to another this can be shown by ?
If an economy is productively efficient ?
When the financial system lacks the capability of making judgement about investment opportunities due to asymmetric information leading to potentially bad credit risks lending is subject to ?