One of the ten principles of economics is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. What is the opportunity cost of that capital accumulation?
A) People need to work longer hours, thus having less time for leisure.
B) People need to consume less goods and services now in order to enjoy more consumption in the future.
C) People need to recycle resources so that future generations can produce goods and services with the accumulated capital.
D) People need to devote less time in school and more at work.

Question

Quizplus · Accepted Answer

The opportunity cost of capital accumulation is the present consumption of goods and services that has to be sacrificed in order to invest in the accumulation of capital for future consumption. Therefore, people need to consume less goods and services now in order to have more consumption in the future.

One of the Ten Principles of Economics Is That People