Is there an opportunity cost to increased investment in capital goods today?
A) Yes,increased production of capital goods means fewer consumer goods today.
B) Yes,increased production of capital goods today means less economic growth in the future.
C) No,increased production of capital goods today does not mean fewer consumer goods today.
D) No,increased production of capital goods today guarantees more consumption today.
E) No,if society is producing at an efficient point on the production possibilities frontier (PPF),then there is no opportunity cost to investment in capital goods.

Question

Quizplus · Accepted Answer

According to the concept of opportunity cost, increasing investment in capital goods will lead to a trade-off with the production of consumer goods. This is because resources are finite, and allocating more to capital goods means less is available for consumer goods. Therefore, there is an opportunity cost to increased investment in capital goods today - the sacrifice of current consumption of goods and services.

Is There an Opportunity Cost to Increased Investment in Capital