Couple of Other Economics Questions - Quickies once again

[aditya]

OK. So I put E on my test for 1, and the teacher said that A was the correct answer. I can see how C is the correct answer as in PPF, it your going from one to another, the opportunity cost of producing one increases as you move along the graph (if that made any sense.)

But I still think that E makes the most sense, meh I guess I have to talk to professor about it.

[tabako]

For question 1, C is definitely not correct. You would need something in the question that explicitly stated what kind of production function you were working with for C to be an accurate statement (it may or may not be depending on the production function). And even then, it wouldn't be true due to "the law of opportunity cost." It would be true because of "the law of decreasing marginal utility", which is sometimes stated "as the law of increasing opportunity cost."

I really like E as the correct answer, as I interpret the "law of opportunity cost" as simply stating that whenever you choose to do something with your time or choose to buy something, there is an implicit cost which takes the form of you not being able to do something else with that time or that money.

While it is true that under (normal) circumstances, as the cost of something increases, people will substitute away from that good, it is wrong to call this the the "law of opportunity cost"

[basementproject]

This sounds like a case of taking a definition from a textbook or something.

I've been through many an economics text, and nearly all of them use different definitions for some of the same concepts.

Is it possible that A was the definition of the 'law of opportunity cost' from the textbook your class uses, and that's what your prof wanted?

[aditya]

haha oops...I meant that the correct answer for 1 was C, and I put E. A is absolutely wrong.

Figured out why C was the correct answer however, the definition of "law of opportunity cost" is verbatim answer choice C. But I still think E is right, and hence the question should either be DQed or not counted. Wish me luck once again.

[SuperUberBob]

[ QUOTE ]
1e (absolutely sure beyond reasonable doubt)

2a (pretty sure)

[/ QUOTE ]

QFT

For number 1, A is beyond wrong and your teacher should be beaten.

[orlov]

[ QUOTE ]
OK. So I put E on my test for 1, and the teacher said that A was the correct answer. I can see how C is the correct answer as in PPF, it your going from one to another, the opportunity cost of producing one increases as you move along the graph (if that made any sense.)

But I still think that E makes the most sense, meh I guess I have to talk to professor about it.

[/ QUOTE ]
your teacher is a retard.

However i am now more opting towards c.

Because the question asks for the law of opportunity cost. Answer e is more a way of defining opportunity cost.

But then again strictly speaking there is no law of opportunity cost, only a law of increasing opportunity cost.

[aditya]

[ QUOTE ]
[ QUOTE ]
1e (absolutely sure beyond reasonable doubt)

2a (pretty sure)

[/ QUOTE ]

QFT

For number 1, A is beyond wrong and your teacher should be beaten.

[/ QUOTE ]

guys, I couldn't edit my post so I posted a new post. Answer to 1 is C not A. I put E.

[RacersEdge]

The problem with e is that the "if" part is talking about producers, but the "then" part is talking about some generic "we". But in c, it's clearly focused on producers.

But c also sounds like "marginal opportunity cost" which I'm not sure why it would be increasing.

[Jamougha]

Beat, your teacher is dumb.

[ItalianFX]

Okay...

The law of opportunity cost is C in that as we produce more of good X, we must give up more and more of good Y. It's the basic Production Possibilities Curve (PPC).