Q1:- The nation has two alternative of producing 100X+200Y or 102X+196Y from its given resource - Economics - Introduction

Question

Q1:- The nation has two alternative of producing 100X+200Y or
102X+196Y from its given resource
The nation choose the second What is the marginal opportunity cost
of producing X
(a) 4Y (b) 3Y (c) 2Y (d) 1Y

Q:-2 Marginal cost of a good includes
(a) only variable cost
(b) both variable cost and fixed cost
(c) average variable cost
(d) None of these

Sanjari Kalantri · Accepted Answer

Dear Student,
1 When the nation chooses to produce the second alternative,
it chooses to forgo 4 units of Y to produce 2 additional units of X
Thus, the marginal opportunity cost of producing an additional unit
of X is 2 units of Y, or 2Y The correct answer is option (c)
2 Total cost includes both fixed costs and marginal costs, out
of which, fixed costs are constant at all levels of output The
change in total cost (or, marginal cost) is thus, due to variable
costs only The correct answer is option (a)