Question

Which of the following statements about opportunity cost are true?

CHECK ALL THAT APPLY.

It exists because resources are scarce.
It influences consumers.
It influences producers.
It assists in anticipating profits.
It encourages people to spread their resources around.

Answer 1

True:
- It exists because resources are scarce. (Opportunity cost arises because choices must be made among limited resources.)
- It influences consumers. (Consumers weigh the value of the next-best alternative when choosing how to spend time or money.)
- It influences producers. (Producers face trade-offs about what to produce and must consider the value of foregone alternatives.)
- It assists in anticipating profits. (Considering opportunity costs lets firms calculate economic profit and compare the returns of different uses of resources.)

False:
- It encourages people to spread their resources around. (Opportunity cost simply forces consideration of trade-offs; it does not inherently push people toward spreading resources — they may concentrate resources where the return is highest.)