Day: May 26, 2022

The steel required for the construction of a new car-assembly plant in a fully employed economy, is obtained by increasing the output of the domestic steel industry.

What is the opportunity cost of producing the steel?

Select ONE answer:

1. the alternative benefits forgone by diverting additional resources to steel manufacture
2. the alternative benefits forgone by increasing the capacity of the car industry
3. the alternative benefits that would have been obtained by putting the steel to other uses
4. zero, since there is no reduction in the steel supplied to other steel users

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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