How does a production possibility Chart assist in outlining opportunity cost?
How does a production possibility chart assist in outlining opportunity cost? It compares profit potential of one product to another. It compares consumer demand of one product to another. It compares production numbers of one product to another.
What is production opportunity cost?
In economics, opportunity costs refer to the value of the next-best alternative use of that resource given limited resources. When resources are scarce, consider the cost between alternatives. Do this so that resources (such as time, money, and energy) are used as efficiently as possible.
Is opportunity cost a factor of production?
The opportunity cost of a factor of production that is not owned by a firm is what has to be paid to retain it in its present use. This is also termed as the explicit cost of the firm.
Which scenarios can be considered effects of Sole Sister shoe store choosing to sell dress shoes over sneakers select two answers?
High school athletes stop shopping there and the inventory of sports socks goes unsold can be considered effects of sole sister shoe store choosing to sell dress shoes over the sneaker. Further Explanation: The company chooses to sell dress shoes over sneaker shoes.
What is Ricardo’s opportunity cost quizlet?
What is Ricardo’s opportunity cost? Choosing the promotion over time with his friends. Read the scenario. Samira is a freshman basketball player who hopes to go to college on a basketball scholarship.
What is a graphical representation of the combination of goods and services that can be produced in a situation production opportunity curve?
production possibilities curve (PPC) (also called a production possibilities frontier) a graphical model that represents all of the different combinations of two goods that can be produced; the PPC captures scarcity of resources and opportunity costs.
What is a constant opportunity cost graph?
when the opportunity cost of a good remains constant as output of the good increases, which is represented as a PPC curve that is a straight line; for example, if Colin always gives up producing 2 fidget spinners every time he produces a Pokemon card, he has constant opportunity costs.
When opportunity costs are constant the PPF will be a straight line?
A straight-line PPF represents constant opportunity costs between two goods. For example, for every unit of X produced, one unit of Y is forfeited. A bowed-outward PPF represents increasing opportunity costs.
How do you know if opportunity cost is increasing?
When the PPC is a straight line, opportunity costs are the same no matter how far you move along the curve. When the PPC is concave (bowed out), opportunity costs increase as you move along the curve. When the PPC is convex (bowed in), opportunity costs are decreasing.
What is an opportunity cost example?
When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend the money on something else.
What does it mean if opportunity cost is high?
Assuming your other options were less expensive, the value of what it would have cost to rent elsewhere is your opportunity cost. Sometimes the opportunity cost is high, such as if you gave up the chance to locate in a terrific corner store that was renting for just $2,000/month.
How do you calculate opportunity cost examples?
The formula is not “what I sacrifice minus what I gain.” Instead, it is necessary to look at the ratio of sacrifice to gain. Going back to our example, if you chose to spend an hour working as a bartender instead of as a mechanic, then you are actually giving up ($50 mechanic / $25 bartender) = $2 of opportunity cost.
What’s an example of negative opportunity cost?
If you spent 50 dollars which meant that you could not gain 100 dollars, your opportunity cost is 100 dollars. If you gained 100 dollars but instead you did not lose 50 dollars, your opportunity cost is negative 50 dollars (there’s no opportunity cost for taking the 100 dollars, as the opportunity cost is negative).
Under what conditions is opportunity cost zero?
There are situations when the opportunity cost is equal to zero. They include: When there are no alternatives or where there is no choice.