Question

A construction company plans to build a certain number of apartment buildings and stores on a piece of land. This PPC shows the combination of projects it can build.

If the company constructs apartment buildings, the number of stores will be ____. At the point the company is producing, the opportunity cost of building 3 more stores will be ____ apartment buildings.

a. 5; 10

b. 10; 11

c. 11; 12

d. 12; 10

Answer 1

Economics explains trade-offs via the production possibilities curve, but specific numbers of the trade-off between apartment buildings and stores can't be provided without more details of the PPC for the construction company. To determine opportunity costs, one must know the slope of the PPC at the current production point.

Step-by-step explanation:

The opportunity cost concept in economics is demonstrated through the production possibilities curve (PPC), which illustrates the trade-offs between two different goods.

In the context of the construction company in the question, the PPC would demonstrate the trade-off between constructing apartment buildings and stores.

Without the specifics of the PPC provided in the question, it is not possible to give the precise numbers of apartment buildings and stores or the opportunity cost of building more stores.

However, we can say that the opportunity cost of constructing more of one type of project (such as stores) is the number of the other type of project (such as apartment buildings) that the company must forego.