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Chapter 2: Q. c - For Critical Thinking (page 34)

If the U.N. follows through on a proposal to add production targets for 148 more items to its Sustainable Development Goals, why might we expect that the opportunity cost in terms of other goods and services that must be forgone could be even greater? Explain briefly.

Short Answer

Expert verified

Because the addition of new items will lead to less production of some other items thus the opportunity cost would be greater.

Step by step solution

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01

Step 1. Opportunity Cost.

Opportunity cost is the next best alternative to satisfy the want.

02

Step 2. Reason.

The opportunity cost in terms of other goods and services that must be forgone will be greater because the resources used in the production of the new goods will be derived from the production of the existing goods will lead to greater opportunity cost.

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Most popular questions from this chapter

Explain why the scarcity problem causes people to consider opportunity costs and trade-offs among choices.

Suppose that in Fig 2-1, a student currently is allocating her study time in such a way that she is earning a C in mathematics and a C in economics. What is the opportunity cost, measured in terms of the resulting grade change, if this student wishes to reallocate her study time in order to raise her mathematics grade by one letter, from a C to a B?

Suppose that in Fig 2-24, the nation with other wise the same background conditions as in Problem 2-23 currently has sufficient resources to produce combinations located along only the innermost production possibilities curve. If the nation produces no additional smartphones this year, will the intermediate-shifted PPC resulting from minimal economic growth or the farthest shifted PPC caused by more significant economic growth be more likely to apply next year?

A nationโ€™s residents can allocate their scarce resources either to producing consumer goods or to producing human capitalโ€”that is, providing themselves with training and education. The following table displays the production possibilities for this nation:

Production CombinationUnits of Consumer GoodsUnits of Human Capital
A0100
B1097
C2090
D3075
E4055
F5030
G600

(a) Suppose that the nationโ€™s residents currently produce combination A. What is the opportunity cost of increasing the production of consumption goods by 10 units? By 60 units?

(b) Does the law of increasing additional costs hold true for this nation? Why or why not?

Why might the production possibilities curve relating the number of electronic-gadget-accessory boxes at passenger seats to the quantity of seats on a plane be bowed? Explain your reasoning.

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