Opportunity Cost

Question 1

Assessing opportunity cost involves

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making choices and dealing with consequences.

Question 2

Rescooperate Ice Cream Shop recently analyzed their books. They found that in the past year, they made $100,000 selling ice cream and spent $75,000 on supplies and factory space. The remaining $25,000 represents

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profit.

Question 3

Opportunity cost occurs because of a producer’s need to

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allocate resources.

Question 4

Venya and Kari own a flower shop that specializes in custom bouquets. Wanting to expand into selling potted plants, they create a production possibility chart to assess whether the potted plants are a good idea. Study their chart:

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50

Question 5

One method for studying opportunity cost is to think in terms of

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tradeoffs

Question 6

How does a production possibility chart assist in outlining opportunity cost?

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It compares production numbers of one product to another.

Opportunity Cost Answers

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