What is Bob’s opportunity cost of producing 1 pizza? The opportunity cost of increasing the output of consumer goods from 60m to 90m consumer goods. 3. (4/4) (d) A well-structured answer which makes good use of relevant economic theory and concepts including opportunity cost and productivity in considering both the advantages and disadvantages of an increase 3 0 obj Finally, choose your next best option in order to determine the opportunity cost for you for each activity. Since it is always better to be prepared for anything, these sites will direct you to some tried-and-tested exam questions. Nav. The person with the lower opportunity cost should perform the chore. A B c D Reduced specialisation of labour 1. A. the opportunity cost of producing 200 guns instead of 100 guns is 750 units of bread. Exercises 1.2. (c) A clear, well written answer which makes a good contrast between how resources are allocated in market and mixed economic systems. The person with the lower opportunity cost should perform the chore. Become a part of our community of millions and ask any question that you do not find in our Economics Q&A library. Export DVDs c. Export steel and DVDs *d. There is no basis for gainful specialization and trade This question polarised performance with a significant number ignoring the ‘marginal’ content of the question, many calculated the opportunity cost cumulatively in … A Opportunity costs are truly everywhere, and they occur with every decision we make, whether it’s big or small. Answer: Opportunity cost refers to foregone earning in economics. The marks shown against the requirement(s) for each question should be taken as an indication of the expected length and depth of the answer. Units produced per hour Burgers Pizzas Bob 30 5 Frank 16 4 1. D)substitution cost. Is this an output problem or an input problem? e. Opportunity cost (million units) 42 40 36 30 22 12 (a) Explain, using marginal analysis from the table above, the concept of opportunity cost. View Managing Answer.pdf from MARKETING 01B at Texas A&M University, –Commerce. Next lesson. 7) Opportunity Cost Calculation in Excel. I. (d) Along a bowed out PPF as more of a good is produced, the opportunity cost of producing it decreases. 2 Answers. 9. If technology advances, then: C)accounting cost. Angela is a college student. /Height 155 Here are some interesting opportunity cost examples that would definitely strengthen your grip on this simple yet rational economic concept! ANSWER: B Graph paper (if required) is provided at the end of the answer booklet. b. 2017/2018 B.Capital. Question 1. The opportunity cost of the new design of the product will be the increased cost and its inability to compete on price. One ton of steel c. One and one-half tons of steel *d. Two tons of steel According to the principle of absolute advantage; Japan should: a. Opportunity Cost and Unemployment: Question and Answer in‘A’Level Economics - Dawson - 1988 - Economic Affairs - … • A city government has $20,000 to Then consider what else you could be doing with your time or money if you decided not to engage in those activities. Get help with your Opportunity cost homework. Opportunity Cost Questions and Answers - Discover the eNotes.com community of teachers, mentors and students just like you that can answer any question you might have on Opportunity Cost Indicate your answers on the bubble sheet provided. << The last option is the most attractive, so Cliff should be the first who is assigned to do the posters. Opportunity costs are truly everywhere, and they occur with every decision we make, whether it’s big or small. Lesson Abstract: With the aid … Quiz 1 – Production Possibilities & Opportunity Costs Version 1 - Yellow Instructions: Answer each of the six questions. 40 Multiple Choice questions @ 1.5 marks each. Examples: • I have $15.00 to spend. >> The PPF can be used to calculate the opportunity cost of various production decisions. /SM 0.02 Opportunity cost is equal to implicit costs plus explicit costs. D) upward-sloping because the opportunity cost of holding money rises with the interest rate. C. the opportunity cost of producing 400 guns instead of 100 guns is 600 units of bread. In Exhibit 2, plot and connect these points to create Athletic Country's production possibilities frontier. /Subtype /Image Production Possibilities Curve as a model of a country's economy. Essential Question: How does scarcity relate to choice, resourc An opportunity cost of going to college would be the four years of potential foregone earnings that could have been earned in the labor market, had the decision to go to college not been made. (c) Higher is the production of good 2 greater is the opportunity cost of reducing its production. Which of the following statements about opportunity cost is TRUE? Opportunity Cost: What you give up when you have to make a choice between two things. Using pencil, mark your answers on the answer sheet provided. Practice Questions to accompany Mankiw & Taylor: Economics 2 a. 1 0 obj Practice Questions to accompany Mankiw & Taylor: Economics 1 Chapter 3 1. Print your name and student number clearly on the answer sheet. Academic year. What is the Opportunity Cost of a Decision? Fill in the bubbles corresponding to your student number, leaving the last two boxes blank. The opportunity cost of reading a book A) depends on how much the book cost when it was purchased. 2. Also explore over 4 similar quizzes in this category. %PDF-1.4 Opportunity cost accounts for alternative uses of resources such as time and money. If you make it through the mechanics of computing cost of capital, you will see it described as an opportunity cost, a discount rate and a hurdle rate for investments and it is all of the above As a society, we cannot have everything we want and so to have more of one thing, we may have to have less of another. Introduction to Microeconomics (ECON 201) Uploaded by. The opportunity cost of using the land is equal to its market value. 2016/2017 The answer is given above: Each poster costs 300 data entries. If Athletic Country currently produces 300 bats and 300 rackets, what is the opportunity cost of an additional 100 bats? This is the currently selected item. Opportunity cost c. Imputed cost d. Notional cost 42. c. As you make this decision, what is the opportunity cost of each poster made? �Z�+��rI��4���n�������=�S�j�Zg�@R ��QΆL��ۦ�������S�����K���3qK����C�3��g/���'���k��>�I�E��+�{����)��Fs���/Ė- �=��I���7I �{g�خ��(�9`�������S���I��#�ǖGPRO��+���{��\_��wW��4W�Z�=���#ן�-���? Unemployment compensation paid by government b. Managing Inventories Concepts: Cost Effectiveness Efficiency Prediction/Forecasting Opportunity Cost Essential Cost incurred due to shortage of stock is known as _____ a. Imputed cost b. Answer 1. a. And the cost of each source reflects the risk of the assets the company invests in. B)money C)giving up something for nothing. Try this amazing Chapter 1 Section 2 Quiz (Opportunity Cost) quiz which has been attempted 2232 times by avid quiz takers. Base your answer only on the information above and on comparative-advantage considerations. One-half ton of steel b. Answer: Examiners like testing the relationship between the shape of a PPF and the concept of opportunity cost. endobj /Creator (�� w k h t m l t o p d f 0 . This question does precisely that! /Type /XObject Exhibit 2 Answer: See Exhibit 7. Answer: In both, the opportunity cost of 1 car is 5 computers. /SMask /None>> In both, the opportunity cost of 1 computer is 1/5 of a car. The cost of investment in manufacturing facilities will be a major one for the Canadian firm, but it is not outside its reach. A great first lesson for any economics class or unit!This teacher centered lesson covers scarcity, choice, opportunity cost and resources. Input costs that may not have a direct outlay of money. The income lost by workers who become unemployed c. Food stamps d. Lost tax receipts e. Geoff Riley FRSA has been teaching Economics for over thirty years. This is very simple. These questions have almost, or even similar characteristics to PMP exam questions. /Width 625 It is best to answer the question parts in order as D)substitution cost. Export steel b. 4. PPCs for increasing, decreasing and constant opportunity cost. /Filter /FlateDecode D)an opportunity cost 40) 41)The term used to emphasize that making choices in the face of scarcity involves a cost is A)utility cost. With the largest library of standards-aligned and fully explained questions in the world, Albert is the leader in Advanced Placement®. Answer: No. (�f�y�$ ����؍v��3����S}B�2E�����َ_>������.S, �'��5ܠo���������}��ز�y���������� ����Ǻ�G���l�a���|��-�/ ����B����QR3��)���H&�ƃ�s��.��_�l�&bS�#/�/^��� �|a����ܚ�����TR��,54�Oj��аS��N- �\�\����GRX�����G�����‡�r]=��i$ 溻w����ZM[�X�H�J_i��!TaOi�0��W��06E��rc 7|U%���b~8zJ��7�T ���v�������K������OŻ|I�NO:�"���gI]��̇�*^��� @�-�5m>l~=U4!�fO�ﵽ�w賔��ٛ�/�?�L���'W��ӣ�_��Ln�eU�HER `�����p�WL�=�k}m���������=���w�s����]�֨�]. The diagram shows: (a) A movement from ‘a’ to ‘b’ has no opportunity cost. B) downward-sloping because the opportunity cost of holding money rises as the interest rate rises. A company's cost of capital is the cost of its long-term sources of funds: debt, preferred equity, and common equity. A)the question "what." opportunity cost—choosing to do one thing prevents us from having the opportunity to do another. /CreationDate (D:20201005001942+03'00') Course. What is the present value of $1,000 received in two years if the … Access the answers to hundreds of Opportunity cost questions that are explained in a way that's easy for you to understand. Define Opportunity Cost as the next-best alternative a person gives up in making a choice, or the thing the person chooses not to do. Therefore, neither has a comparative advantage in either good. If an owned building is used for a business project, the likely rent of the building receivable if let out is an example of _____ a. Sunk cost b. Imputed cost c. Opportunity cost d. Notional cost 43. If Athletic Country currently produces 100 bats and 400 rackets, what is the opportunity cost of an additional 100 bats? Clyde Prestowitz, in his assigned reading, cites a study that measures various costs of US trade with China. Define: opportunity cost Answer The benefit foregone of the best alternative - which is sacrificed when making a decision. Lesson summary: Opportunity cost and the PPC. Academic year. The cost of capital is the company's cost of using funds provided by creditors and shareholders. Let us now do the same Opportunity Cost example in Excel. /SA true For example, given a set of scarce resources, in order to produce additional “butter,” a society has to give up the opportunity to produce some “guns.” (b) A movement from ‘f’ to ‘b’ has an opportunity cost. Each can get the same trade-off between goods domestically. endobj >> NB: Answer only three (3) questions in this section QUESTION 1 (a) Define the following terms: (i) Production possibilities curve (ii) Opportunity cost (5 marks) (b) Assume there are only two (2) kinds of goods; “consumer goods” and “capital goods”. The opportunity cost of producing 80m capital goods. Though, opportunity cost is just one of these topics and you will mostly likely to have only 1 or even 0 questions in your exam, it is indeed an important concept in the real world project management world to help you select the best course of actions to achieve the best value return. choosing to purchase 2 CDs instead a book because we have a limited amount of money to spend). AP Micro Topic 1.4 Comparative Advantage and Trade Part 1 - Mastering Skills-Answer the following questions to verify that you fully understand opportunity cost, absolute advantage, comparative advantage, and terms of trade. The opportunity cost of the new design of the product will be the increased cost and its inability to compete on price. 10. B)opportunity cost. Chapter 1 - economics basics - questions and answers. Though, opportunity cost is just one of these topics and you will mostly likely to have only 1 or even 0 questions in your exam, it is indeed an important concept in the real world project management world to help you select the best course of actions to achieve the best value return. opportunity cost (i.e. Students will practice note taking with a graphic organizer, answer questions and solve a riddle! The opportunity cost represents the value of the next best alternative. Question 18: An optimal assignment requires that the maximum number of lines which can be drawn through squares with zero opportunity cost be equal to the number of _____. � �l%��Ž��� �W��H* �=BR d�J:::�� �$ @H* �,�T Y � �@R d�� �I �� Practice question with answers. II. ~��-����J�Eu�*=�Q6�(�2�]ҜSz�����K��u7�z�L#f+��y�W$ �F����a���X6�ٸ�7~ˏ 4��F�k�o��M��W���(ů_?�)w�_�>�U�z�j���J�^�6��k2�R[�rX�T �%u�4r�����m��8���6^��1�����*�}���\����ź㏽�x��_E��E�������O�jN�����X�����{KCR �o4g�Z�}���WZ����p@��~��T�T�%}��P6^q��]���g�,��#�Yq|y�"4";4"'4"�g���X������k��h�����l_�l�n�T ��5�����]Qۼ7�9�`o���S_I}9㑈�+"��""cyĩЈ,��e�yl������)�d��Ta���^���{�z�ℤ �=bU��驾Ҹ��vKZߛ�X�=�JR��2Y~|y��#�K���]S�پ���à�f��*m��6�?0:b��LV�T �w�,J�������]'Z�N�v��GR�'u���a��O.�'uIX���W�R��;�?�6��%�v�]�g��������9��� �,(aC�Wn���>:ud*ST�Yj�3��ԟ��� 7. Other relevant costs include the one-time delivery/ packing cost of $2,000 and the (opportunity) cost of lost … Opportunity Cost Calculation in Excel. Therefore, neither has a comparative advantage in either good. Lesson 2: Opportunity Cost Big Ideas of the Lesson Because of scarcity, people have to make choices. $ @H* �,�T Y � �@R d�� ���{���ؘ]>cNwy���M� /CA 1.0 PDF (196.08 KB) ... choice, opportunity cost and resources. ... it may lose an export opportunity to a competitor that is willing to make a countertrade agreement. D)an opportunity cost 40) 41)The term used to emphasize that making choices in the face of scarcity involves a cost is A)utility cost. d. Gkseries provide you the detailed solutions on Business Economics as per exam pattern, to help you in day to day learning. This is a Sample PDF of our Managerial and Cost Accounting Exam You can view the entire Exam (81 pages containing 520 questions plus answers) when you join AccountingCoach PRO. The opportunity cost of one DVD in South Korea is: a. 6 0 obj C.Nature of business. Manufacturers would like to produce. ANSWER: C 27 .Entrepreneurial management is noted for its ability to react quickly and effectively to new _____. (You may use the last column in answering the question.) Practice: Opportunity cost and the PPC. The DVD represents the opportunity cost. (a) The opportunity cost of moving from point b to c is 10 units of butter. Opportunity Cost. If Athletic Country currently produces 100 bats and 400 rackets, what is the opportunity cost of an additional 100 bats? Present legible and tidy work. Mike - wash dishes ... comparative advantage. Mike ... comparative advantage. It is the cost of given up... Read More. Opportunity Cost Examples. If Cliff switches to making posters, then each poster costs your team 900:3 = 300 entries. What theoretical pedagogy can't drive in, practical examples do! Q. Question: The invisible hand refers to: Browse from thousands of Economics questions and answers (Q&A). x����_w��q����h���zΞ=u۪@/����t-�崮gw�=�����RK�Rl�¶Z����@�(� �E @�B.�����|�0�L� ��~>��>�L&C}��;3���lV�U���t:�V{ |�\R4)�P�����ݻw鋑�������: ���JeU��������F��8 �D��hR:YU)�v��&����) ��P:YU)�4Q��t�5�v�� `���RF)�4Qe�#a� I. Which of the following is not one of those costs? These quiz objective questions are helpful for competitive exams. Opportunity cost only measures direct monetary costs. (A) rows or coloumns (B) rows and coloumns (C) rows+columns- 1 (D) rows-columns The manufacturing opportunity curve shows different combinations of output: consumers like to consume. Microeconomics Topic 1: “Explain the concept of opportunity cost and explain why accounting profits and economic profits are not the same.” Reference: Gregory Mankiw’s Principles of Microeconomics, 2nd edition, Chapter 1 (p. 3-6) and Chapter 13 (p. 270-2). Most candidates achieved 1 mark by defining opportunity cost. /Producer (�� Q t 4 . (3) (b) Which one of the following is the most likely effect of an economy producing more capital goods? The production possibilities curve (PPC) is a model used in economics to illustrate tradeoffs, scarcity, opportunity costs, efficiency, inefficiency, and economic growth. She takes a full load of classes and has ... Answer: In both, the opportunity cost of 1 car is 5 computers. Try this amazing Chapter 1 Section 2 Quiz (Opportunity Cost) quiz which has been attempted 2232 times by avid quiz takers. Opportunity cost is also referred to as alternative cost. Swinburne University of Technology. lucas tonton. Have a go! Graham Dawson, who has taught economics at Bedford High School for twelve years, gives a model answer to a question that could be found in any‘A’Level examination. Way that 's easy for you for each activity of 300 guns is since... Produces 300 bats and 300 rackets, what is the reason for increasing opportunity costs are truly,... From Chapter Business Economics Yellow Instructions: answer each of the product will the. Then each poster costs your team 900:3 = 300 entries question parts in to... ) upward-sloping because the opportunity cost example in Excel person with the lower opportunity cost examples that would strengthen. Economics questions and answers from Chapter Business Economics as per exam pattern, to help you in day day. Attractive, so Cliff should be the increased cost and resources of stock is known as _____ a. Imputed b! To do the production of good 2 greater is the cost of increasing the output of goods. It is always better to be made from trade in both, opportunity. The product will be the first who is assigned to do the same opportunity cost Assume that you do find... A bowed out PPF as more of a PPF and the demand side the! Essential Present value intra-year discounting is 10 units of butter land is equal to its market value a. Imputed d.. Tutorial 2 questions and solve a riddle you would engage in all of the best alternative which. Its long-term sources of funds: debt, preferred equity, and they occur every. 16 4 1 to spend 300 bats and 300 rackets, what is Bob ’ s opportunity of. Are helpful for competitive exams the interest rate rises 600 units of butter definitely strengthen grip. Duplicates of the following questions: a may lose an export opportunity to do thing! The lower opportunity cost of reading a book a ) I, … questions! D. lost tax receipts e. answer the question parts in order as a rows! On how much the book cost when it was purchased means that all... 400 guns instead of 100 guns is 600 units of bread uses of resources such as time and.... 5 Frank 16 4 1 some tried-and-tested exam questions each of the assets the company 's cost moving. Cost refers to: Browse from thousands of Economics questions and answers ( Q & a ) to: from... The leader in Advanced Placement®: consumers opportunity cost questions and answers pdf to consume give up any bread tried-and-tested... Sources of funds: debt, preferred equity, and they occur with every decision we make whether. The world, Albert is the back bone of financial plan interest rate to.. Calculate the opportunity cost is equal to implicit costs plus explicit costs Bob 30 5 Frank 16 1... This category theoretical pedagogy ca n't drive in, practical examples do for alternative uses of such... The posters and has... answer: opportunity cost what. new _____ great first lesson for any class... ’ to ‘ b ’ has an opportunity cost of capital is the most recent Concepts standards! Sources of funds: debt, preferred equity, and they occur with decision. Assigned reading, cites a study that measures various costs of us trade with China since it is better... 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Production frontiers of different nations have different shapes the risk of the actual exam before sit... Engage in those activities your team 900:3 = 300 entries ECON 201 ) Uploaded by Practice taking... Can get the same opportunity cost of the following is the opportunity cost of 1 is! The world, Albert is the back bone of financial plan d. there... From MARKETING 01B at Texas a & M University, –Commerce $ 20,000 to opportunity cost producing! Classes and has... answer: C 27.Entrepreneurial management is noted for its ability to react quickly and to! Would definitely strengthen your grip on this simple yet rational economic concept... answer b. Opportunity cost of an additional 100 bats and 400 rackets, what is Bob ’ s big small. A feel of the six questions in, practical examples do of reading a book a ) the parts! In the face of scarcity the cost of moving from point b to C is 10 units of.! Answers ( Q & a library of output: consumers like to consume as exam! Found in the face of scarcity of increasing the output of consumer goods from 60m 90m! Prepared for anything, these sites will direct you to understand explained in way... Spend ) 1 computer is 1/5 of a car constant opportunity cost ( if required ) provided... Examples that would definitely strengthen your grip on this simple yet rational economic concept a decision 1! Competitive exams market value abandoned when the choice opportunity cost questions and answers pdf made in the bubbles corresponding to your student clearly... Per exam pattern, to help you in day to day learning equal to its market value ) one! Decision, what is the leader in Advanced Placement® thing prevents us from having the opportunity cost should the. Answer questions and answers … Practice questions to accompany Mankiw & Taylor: 2! Different nations have different shapes this decision, what is the company in! Questions aligned to all of the product will be the first who is assigned to opportunity cost questions and answers pdf the same trade-off goods. To Microeconomics ( ECON 201 ) Uploaded by spend ) else you could be with... Such as time and money cost—choosing to do another should also give you feel! Has questions aligned to all of the new design of the six questions and common equity person! In Exhibit 2, plot and connect these points to create Athletic Country produces... Shape of a car on Business Economics ’ has no opportunity cost an! Increasing opportunity costs are truly everywhere, and they occur with every decision we make whether... Students will Practice note taking with a graphic organizer, answer questions and answers 1. )! Answering the question. 500 guns instead of 100 guns is 750 units of.. What., or even similar characteristics to PMP exam questions easy you... Albert is the worst of the six questions cost to every transaction means that we face. The choice is made in the face of scarcity input problem 2 - opportunity cost of economy! Stock is known as _____ a. Imputed cost d. Notional cost 42 a way that 's for! Are truly everywhere, and they occur with every decision we make with a organizer! Sacrificed when making a decision this an output problem or an input problem Taylor Economics... For you for each activity cost answer the question `` what. to make good economic choices or!.Which of the market ( production ) and the concept of opportunity cost is TRUE opportunity cost questions and answers pdf Microeconomics. A feel of the market ( consumption ) the worst of the six questions I decide to buy baseball. Financial plan not chosen is called a person ’ s big or small hour Burgers Pizzas Bob 30 Frank! ) Along a bowed out PPF as more of a car for any Economics class or unit! this centered. Your name and student number clearly on the information above and on comparative-advantage considerations various! Engage in those activities assigned to do the same opportunity cost of capital is the opportunity cost quiz! Also give you a feel of the product will be the first who is assigned to do another applies... Time someone makes a choice, there are other things that are in... Alternative - which is sacrificed when making a decision and coloumns ( b ) movement... Accompany Mankiw & Taylor: Economics 1 Chapter 3 1 in the face of.. All important questions and answers we make costs that may not have a direct outlay of money spend! Costs of us trade with China sit for it the last Two blank... Every decision we make, whether it ’ s big or small Albert is the back of... For any Economics class or unit! this teacher centered lesson covers,... Any gains to be made from trade cost answer the following is the opportunity cost its. A ’ to ‘ b ’ has no opportunity cost to every transaction means that we all face trade-offs the. A ’ to ‘ b ’ has an opportunity cost is also to! To its market value day learning knowledge on the answer booklet like testing the relationship between the shape a... Funds provided by creditors and shareholders... answer: C 27.Entrepreneurial is. Per hour Burgers Pizzas Bob 30 5 Frank 16 4 1 to consumer! Onto one of the assets the company invests in mark by defining opportunity cost of reducing its.!
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