Question

The manager of an automobile assembly plant is considering whether to produce cars or sport
utility vehicles (SUVs) next month. Assume that the quantities of labor and other materials
required would be the same for either type of production.​

Answer 1

Answer:

Opportunity cost - Cars if SUV is chosen choice- between cars and SUV scarcity- plant and labour at the plant

Explanation:

The scarce resources are the plant and the labor at the plant. The manager must choose between producing cars and producing SUVs. The opportunity cost of producing cars is the profit that could be earned from producing SUVs; the opportunity cost of producing SUVs is the profit that could be earned from producing cars.

Answer 2

Answer:

Opportunity costs describe the potential advantages that an individual, investor, or business misses out on when selecting one option over another.

Explanation:

The scarce resources are the manufacturer and the labor at the plant. The administrator must choose between making cars and producing SUVs. The opportunity cost of making cars exists in the profit that could be made from making SUVs; the opportunity cost of producing SUVs exists in the profit that could be made from producing cars.

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