QQuestionEconomics
QuestionEconomics
Which situation is the best example of opportunity cost?
A. A country chooses to produce bananas instead of wheat.
B. A country chooses to invest in manufacturing and agriculture.
C. A country chooses to specialize in producing paper products.
D. A country chooses to export all of its products.
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Answer
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Step 1: Understand the concept of opportunity cost
Opportunity cost is an economic concept that refers to the value of the best alternative given up when making a decision. In other words, it's what you sacrifice when you choose one option over another.
Step 2: Analyze the given situations
(A) A country chooses to produce bananas instead of wheat. In this situation, the opportunity cost would be the value of the wheat that could have been produced instead of bananas. (B) A country chooses to invest in manufacturing and agriculture. This option does not represent a clear opportunity cost, as it does not involve giving up one option for another. Instead, it represents a combination of choices. (C) A country chooses to specialize in producing paper products. Specialization can lead to increased efficiency and lower opportunity costs in the production of paper products, but it does not directly illustrate the concept of opportunity cost. (D) A country chooses to export all of its products. Exporting products is a result of production and trade decisions, not a clear example of opportunity cost.
Final Answer
The best example of opportunity cost is situation A: A country chooses to produce bananas instead of wheat.
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