Demonstrating opportunity cost is done through production?
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Yes ! A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth.
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We begin by defining what an opportunity cost means .
Opportunity Cost
This is the giving away of all other alternatives when one alternative is chosen.
HOW TO DEMONSTRATE OPPORTUNITY COST
It can be demonstrated by using production possibility frontiers.(PPF's)
PPF's provide simple but great tools to elaborate the effects of making an economic choice.
A PPF will show all the possible combination of two economic choices and goods available at a particular point in time.
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