Asked by Rachel Romero on May 08, 2024
Verified
The concept of opportunity cost:
A) is irrelevant in socialistic economies because of central planning.
B) suggests that the use of resources in any particular line of production means that alternative outputs must be forgone.
C) is irrelevant if the production possibilities curve is shifting to the right.
D) suggests that insatiable wants can be fulfilled.
Opportunity Cost
The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.
Socialistic Economies
Economic systems where the production and distribution of goods and services are controlled by the state, aiming for equal wealth distribution and reduction of economic inequalities.
Central Planning
Describes an economic system where the government makes all decisions about the production and distribution of goods and services.
- Uncover the pivotal role of opportunity costs in influencing decisions within economic frameworks and resource allocation.
Verified Answer
JH
Jacob HenschelMay 08, 2024
Final Answer :
B
Explanation :
The concept of opportunity cost suggests that the use of resources in any particular line of production means that alternative outputs must be forgone. This is because resources are scarce and must be used efficiently, which means choosing one option over another. Option A is incorrect because even in central planning, there are limited resources and choices have to be made. Option C is incorrect because even if the production possibilities curve is shifting to the right, there are still choices to be made about how to allocate resources. Option D is incorrect because while wants may be insatiable, resources are not, and choices must be made about how to allocate them.
Learning Objectives
- Uncover the pivotal role of opportunity costs in influencing decisions within economic frameworks and resource allocation.