Final answer:
It is true that the cost of making an estimate increases with the level of detail, as more detailed estimates require additional time and resources, much like producing more output demands higher input costs.
Step-by-step explanation:
True. As the level of detail in an estimate increases, the cost of making the estimate also increases. This is comparable to how a firm's costs increase as it produces higher quantities of output because greater detail requires more time and resources, mirroring the need for more inputs in a production process. Higher precision often necessitates specialized skills, tools, or information which are costly. For example, in scientific work, a high level of detail is mandatory and the cost associated with achieving this precision is justified by the need for accurate and reliable data.
Conversely, when less detail is required, an approximation or estimation can be made using fewer resources, and thus at a lower cost. It's all about finding the balance between the desired accuracy and the reasonable cost one is prepared to incur. Keep in mind that in estimating, it's also important to ensure the result is reasonable, checking for arithmetic errors, units correctness, and the logic applied in obtaining the estimate.