The Concept of Opportunity Cost. Opportunity cost of any choice What we forego when we make that choice Most accurate and complete concept of cost Opportunity cost of a choice includes both explicit costs and implicit costs Explicit cost — dollars actually paid out for a choice
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Quantity of corn per Period
Moving from point Ato point Brequires shifting resources out of corn and into chocolate.
At pointF.all resources are used for chocolate.
Quantity of chocolate per PeriodFigure 1: The Production Possibilities Frontier
Military Goods per Period
2. then moved to the PPF during the war. Both military and civilian production increased.
Civilian Goods per PeriodFigure 2: Production and Unemployment
More corn AND More chocolate
Same corn+ More chocolate
Quantity of chocolate per PeriodFigure 3: The Effect of a New Technology to Produce Chocolate