Question

The opportunity cost of an additional 100 dolls is 100 fire trucks. b The opportunity cost of an additional 100 dolls is 50 fire trucks. c Toyland’s production possibilities frontier is a straight, downward-sloping line. d The opportunity cost of an additional 100 dolls increases as more dolls are produced.

Answer 1

Answer:

The correct answer is The opportunity cost of an additional 100 dolls increases as more dolls are produced.

Explanation:

The opportunity cost is understood as the cost incurred in making a decision and not another. It is that value or utility that is sacrificed for choosing an alternative A and neglecting an alternative B. Taking a path means that the benefit offered by the discarded path is waived.

In any decision taken there is an implicit waiver of the utility or benefits that could have been obtained if any other decision had been made.

For each situation there is always more than one way to address it, and each form offers a greater or lesser utility than the others, therefore, whenever one or the other decision is made, the opportunities and possibilities offered by the others will have been renounced, that may be better or worse (opportunity cost greater or lesser).