Using the table provided, answer the following questions: a) Determine the opportunity cost of...
Question:
Using the table provided, answer the following questions:
| Possibility | Cars (in Hundreds) | Bicycles (in Hundreds) |
| A | 15 | 0 |
| B | 11 | 5 |
| C | 8 | 7 |
| D | 5 | 9 |
| E | 0 | 11 |
a) Determine the opportunity cost of additional production at different outputs. Determine which particular combination(s) is most efficient.
b) What are the components of an efficient allocation?
c) How would advancements in assembly line technology for automobile production affect the production of cars and bicycles?
d) Suppose the government imposes a new, expensive tax on gasoline. How might this affect the production of cars and bicycles?
Opportunity Cost:
Opportunity cost is the basis of economic decisions. An economist is always interested in the best utilization of limited resources at hand. Opportunity cost refers to the returns given up for not putting the resources at hand on alternative use. Opportunity cost are the fundamental cost in economic cost-benefit analysis.
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Answer and Explanation: 1
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View this answera) The opportunity cost of producing an additional unit of the bicycle at various production point is given below:
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Opportunity Cost: Formula & Analysis
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Learn what is opportunity cost, including the opportunity cost definition, assessment and examples. See how to calculate opportunity cost using the formula.
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