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.

Question

Quizplus · Accepted Answer

Opportunity cost is the cost of forgoing the next best alternative when making a decision. Therefore, the concept of opportunity cost suggests that the use of resources in any particular line of production means that alternative outputs must be forgone. Option A is incorrect because opportunity cost is relevant in all economies. Option C is incorrect because a shift in the production possibilities curve does not necessarily eliminate the concept of opportunity cost. Option D is incorrect because the concept of opportunity cost does not imply that insatiables wants can be fulfilled.

The Concept of Opportunity Cost