Explain how it might be possible to discuss costs of production of a good or service without using monetary values
What will be an ideal response?
All costs are essentially opportunity costs. That is to say that it is simply the value of the next best available alternative. Therefore, it is possible to discuss costs without mentioning monetary costs by analyzing what was given up to produce a good or a service.
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As healthy people leave an insurance pool, premiums rise, which cause more people to leave the pool and even higher premiums. This describes
A) moral hazard. B) the reversibility paradox. C) irrational pricing. D) a premium death spiral.
Increasing marginal opportunity cost implies that
A) that rising opportunity costs makes it inefficient to produce beyond a certain quantity. B) the law of scarcity. C) the more resources already devoted to any activity, the benefits from allocating yet more resources to that activity decreases by progressively larger amounts. D) the more resources already devoted to any activity, the payoff from allocating yet more resources to that activity increases by progressively smaller amounts.