A HEADLINE article in the text indicates that North Korea is expanding its missile programs.Assume North Korea is currently on its production possibilities curve.If the increase in missile production results in a decrease in food production,this is an example of:
A) Market failure.
B) An inward shift of the production possibilities curve.
C) Opportunity cost.
D) A reduction in available resources.

Question

Quizplus · Accepted Answer

The decrease in food production as a result of increasing missile production is an example of opportunity cost, which is the loss of potential gain from other alternatives when one alternative is chosen. In this case, producing more missiles means less capacity to produce food.

A HEADLINE Article in the Text Indicates That North Korea