Question 8 • (Galli)WCA 2221 Civics/Economics 1st nine weeks 26-27
Which statements demonstrate the meaning of opportunity cost for producers and consumers? Check all that apply.If producers can only produce one item, they must decide which item to produce based on profit.Consumers are limited by their resources, and must give up the chance to purchase one item in order to buy another.Consumers and producers are not limited by scarcity of resources or time. When deciding to produce or purchase one item, another opportunity must be given up.The only factor influencing opportunity cost is personal opinion.
Answer
A
If producers can only produce one item, they must decide which item to produce based on profit.
B
Consumers are limited by their resources, and must give up the chance to purchase one item in order to buy another.
C
Consumers and producers are not limited by scarcity of resources or time.
D
When deciding to produce or purchase one item, another opportunity must be given up.
E
The only factor influencing opportunity cost is personal opinion.
Explanation
Opportunity cost is the value of the next-best option given up when making a choice. Producers who can make only one item must choose what to produce, while consumers with limited resources must give up the chance to buy something else. Statement D describes this tradeoff for both producers and consumers. C is incorrect because scarcity limits resources and time, and E is incorrect because opportunity cost is not based only on personal opinion.
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