This topic contains a solution. Click here to go to the answer

Author Question: Why does the opportunity cost of producing a good rise as more resources are devoted to producing ... (Read 73 times)

Destiiny22

  • Hero Member
  • *****
  • Posts: 557
Why does the opportunity cost of producing a good rise as more resources are devoted to producing that good?
 
  What will be an ideal response?

Question 2

Refer to Scenario 4 . Assume that the state originally spent one-half of its budget on schools and one-half on prisons.
 
  What was the production of schools and prisons? Could the same number be achieved after the price of producing prisons falls to 1.5 million and the price of producing schools rises to 2 million? Explain.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Athena23

  • Sr. Member
  • ****
  • Posts: 305
Answer to Question 1

The opportunity cost of a good rises as we devote more resources to producing it because some resources are better suited to the production of one good than another. This is known as the law of increasing opportunity cost.

Answer to Question 2

Production is five schools and two and one-half prisons. No, the same number of schools and prisons could not be built after the price of production changes. If the state continues to divide its budget equally, production would be two and one-half schools and three and one-third prisons. If the budget were juggled, the maximum number of schools that could be built is five, but no prisons could be built. And, if two and one-half prisons were built, there would be enough left in the budget to build just over three schools.





 

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

Did you know?

Bacteria have flourished on the earth for over three billion years. They were the first life forms on the planet.

Did you know?

Blood is approximately twice as thick as water because of the cells and other components found in it.

Did you know?

Recent studies have shown that the number of medication errors increases in relation to the number of orders that are verified per pharmacist, per work shift.

Did you know?

Between 1999 and 2012, American adults with high total cholesterol decreased from 18.3% to 12.9%

For a complete list of videos, visit our video library