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:
- the alternative benefits forgone by diverting additional resources to steel manufacture
- the alternative benefits forgone by increasing the capacity of the car industry
- the alternative benefits that would have been obtained by putting the steel to other uses
- 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:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Economics KS4 and KS5 classes.
The answer is 1
- Correct
- Not correct
- Not correct
- Not correct
This work is licensed under a Creative Commons Attribution 4.0 International License.
The Multiple Choice Questions Blog 