Question

Is there an opportunity cost to increased investment in capital goods today? Choose one: A. No, increased production of capital goods today does not mean fewer consumer goods today. B. Yes, increased production of capital goods today means less economic growth in the future. C. No, increased production of capital goods today guarantees more consumption today. D. No, if society is producing at an efficient point on the production possibilities frontier (PPF), then there is no opportunity cost to investment in capital goods. E. Yes, increased production of capital goods means fewer consumer goods today.

Answer 1

The answer to that statement is E) Yes, an increase in the production of capital goods means less current consumer goods.

Further explanation

Opportunity cost is a measure of economic costs that must be incurred to produce a certain good or service about other alternatives that must be sacrificed.

In simple opportunity cost is the cost arising from the loss of opportunity due to the fulfillment of another need. For example, if more resources are used to produce food, fewer resources will be used to produce drinks. Opportunity costs arise, because of the choices made by individuals, companies, and communities for the scarcity faced.

There are several characteristics of the opportunity costs. The following are the characteristics of opportunity costs:

1. How to calculate opportunity costs is not always associated with money. But it can be linked to happiness, time, benefits gained in the future, and others.
2. Have many possibilities related to its usefulness?
3. The choice of opportunity costs depends on the intent and condition of each individual/company.
4. Opportunity costs are generally secondary and tertiary needs.

The following are the benefits of Opportunity Cost Calculation:

• Open Business Opportunities & Minimize Risk
• Help with Capital Calculations
• Simplify Setting Priorities
• Save Business Expenditures

Learn more

Opportunity Costs brainly.com/question/13036997, brainly.com/question/12121515

Details

Class: College

Subject: Business

Keyword: opportunity cost, The opportunity cost advantage.

Answer 2

Answer: Option E

           

Explanation: Opportunity cost refers to the cost of loosing profit while choosing one alternative over other.

Taking the given case into consideration, if we invest more in capital goods today then the future generation will get more consumer goods and vice - versa. However as the capital is a limited resources we have to make a choice between capital goods and consumer goods in the present.

Hence if we invest more in capital goods today we will be having less of consumer goods.