Opportunity Cost

What does PPF stand for?

• People's Preference Foundation

• Product Price Fluctuation

• Potential Profit Forecast

• Production Possibility Frontier

What is the marginal cost of 1 more rabbit in scenario E?

• 2 rabbits

• 40 berries

• 1/20 of a rabbit

• 20 berries

If you want 20 more berries in scenario E, what must you give up?

• 10 berries

• 2 rabbits

• 40 berries

• 1 rabbit

What is the marginal cost of 1 more berry in scenario E?

• 1/20 of a rabbit

• 1 rabbit

• 2 rabbits

• 40 berries

What does the term 'opportunity cost' refer to?

• The profit lost from choosing one option over another

• The cost of producing one more unit in monetary terms

• The monetary cost of an investment

• The cost of an alternative that must be forgone

What is assumed about the relationship between berries and rabbits in scenario E for calculating marginal cost?

• It is exponential

• It is logarithmic

• It is somewhat linear

• It is perfectly linear

What is the opportunity cost of going after one more rabbit?

• The money spent on hunting equipment

• The energy expended during hunting

• The time spent hunting

• The berries you have to give up

What does 'marginal cost' sometimes refer to in other scenarios?

• The cost of the last unit produced

• The cost given in actual monetary units

• The total cost divided by the number of units

• The cost of starting production

How does the concept of 'economies of scale' affect the marginal cost of production?

• It increases the marginal cost as production increases

• It decreases the marginal cost as production increases

• It has no effect on the marginal cost of production

• It first decreases then increases the marginal cost as production increases

What role does the 'law of diminishing returns' play in the production of goods?

• It states that adding more of one factor of production, while holding others constant, will at some point yield lower per-unit returns

• It guarantees that production efficiencies will increase indefinitely with added inputs

• It suggests that production costs decrease with the addition of every unit

• It indicates that production outputs will double with every additional unit of input