Question

answer the following questions about how opportunity costs affect the production possibilities frontier.

a. in the real world, opportunity cost tends to be
constant.
decreasing.
increasing.
negative.

b. stating that resources are specialized means that
some resources are better at producing certain goods while others are better at producing different goods.
education is required to become productive at producing goods.
as we increase the production of goods and services, the dollar cost of producing those goods will decrease.
there is a limited amount of resources used to produce goods.

c. an example of specialization is
alan thinks his economics exam will be very difficult so he studies more than usual for the exam.
anita purchases a new computer for her publishing business.
monti decides to pick up an extra shift at work and hire a company to paint his house.
susan decides to enroll in a master’s degree program.

Explanation:

a. In real-world production, resources are not perfectly adaptable to all goods. As more of one good is produced, resources less suited for it are used, raising the opportunity cost of each additional unit.
b. Resource specialization refers to resources having varying comparative advantages in producing different goods, meaning some are more efficient at specific products.
c. Specialization involves focusing on a task one is efficient at and trading for other needs. Monti focuses on his work (where he is productive) and pays specialists to paint his house, which is an example of this.

Answer:

a. increasing.
b. some resources are better at producing certain goods while others are better at producing different goods.
c. Monti decides to pick up an extra shift at work and hire a company to paint his house.