Choose the correct statements. 1.Opportunity cost of a good is the increase in the quantity produced of one good divided by the decrease in the quantity produced of another good as we move along the PPF.
2.The opportunity cost of an action is the highest-valued alternative forgone.
3.Opportunity cost is a ratio.
4.There is no relationship between the opportunity cost of producing an additional good measured on the x-axis and the opportunity cost of producing an additional good measured on the y-axis.
A)Statements 1 and 3 are correct.
B)Statements 1 and 2 are correct.
C)Statements 2 and 3 are correct.
D)Statements 2 and 4 are correct.
E)Statements 3 and 4 are correct.

Question

Quizplus · Accepted Answer

Statement 2 is correct because opportunity cost is defined as the highest-valued alternative forgone. Statement 3 is correct because opportunity cost can be expressed as a ratio of what is given up to what is gained.

Choose the Correct Statements