Question

Assume that your classmate suggested that both graphs represent constant opportunity costs because movement from combinations A to B, B to C, and C to D stays the same for each
economy. Explain why this is incorrect.

Answer 1

Answer:

The movement of the combinations, explained by your classmate, is presented in an equal way, which does not represent an opportunity cost. In order to be able to perceive a constant opportunity cost, the combinations should present different values, and the choice of one of them, would cause the loss of opportunity to submit to the results that would be obtained with the choice of the others. However, as all combinations are the same, choosing any one would give the same results.

Explanation:

A constant opportunity cost refers to the presentation of elements in a business that would happen differently from each other and that would present different profitable results in a constant and extended way, showing the value and benefits that each one has individually.