The cost of duplicating productive capability using current technology is called:
A)current cost.
B)replacement cost.
C)historical cost.
D)opportunity cost.

Question

Quizplus · Accepted Answer

The cost of duplicating productive capability using current technology is called replacement cost. This cost includes the cost of acquiring new machinery, equipment, and technology that would be needed to replicate the productive capability. Historical cost refers to the original cost of an asset when it was first acquired or constructed. Current cost refers to the present value of an asset, which may be different from its original cost due to factors such as inflation. Opportunity cost refers to the cost of making a choice, i.e. the cost of foregone alternatives. None of the other options accurately describe the cost of duplicating productive capability. The term used to refer to the cost of duplicating productive capability using current technology is replacement cost. This cost takes into account the current market value of the resources and technology required to duplicate the capability. It is usually higher than historical cost, which measures the original cost of acquiring the productive capability, because technology advances and resource prices change over time. Current cost refers to the cost of replacing an asset with a similar one in the current market, while opportunity cost refers to the cost of forgoing the next best alternative when making a choice. Therefore, the most appropriate option is B - replacement cost.

The Cost of Duplicating Productive Capability Using Current Technology Is