QuestionJune 14, 2025

Multiple Choice 1 point What type of opportunity costs are demonstrated in this economy? Increasing Opportunity Costs Constant Opportunity Costs

Multiple Choice 1 point What type of opportunity costs are demonstrated in this economy? Increasing Opportunity Costs Constant Opportunity Costs
Multiple Choice 1 point What type of opportunity costs are demonstrated in this economy? Increasing Opportunity Costs Constant Opportunity Costs

Solution
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Answer

Increasing Opportunity Costs Explanation 1. Define Opportunity Costs Opportunity cost refers to the loss of potential gain from other alternatives when one alternative is chosen. 2. Analyze Types of Opportunity Costs **Increasing Opportunity Costs** occur when producing more of one good requires larger and larger sacrifices of another good. **Constant Opportunity Costs** occur when the opportunity cost remains the same as production increases. 3. Determine the Type in Context If resources are not perfectly adaptable for producing both goods, it leads to increasing opportunity costs. If they are perfectly adaptable, it results in constant opportunity costs.

Explanation

1. Define Opportunity Costs<br /> Opportunity cost refers to the loss of potential gain from other alternatives when one alternative is chosen.<br /><br />2. Analyze Types of Opportunity Costs<br /> **Increasing Opportunity Costs** occur when producing more of one good requires larger and larger sacrifices of another good. **Constant Opportunity Costs** occur when the opportunity cost remains the same as production increases.<br /><br />3. Determine the Type in Context<br /> If resources are not perfectly adaptable for producing both goods, it leads to increasing opportunity costs. If they are perfectly adaptable, it results in constant opportunity costs.
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