Understanding Opportunity Cost and Marginal Cost

The video tutorial explores the concept of opportunity cost using scenarios involving rabbits and berries. It explains how changing preferences from berries to protein affects trade-offs and opportunity costs. The tutorial introduces the production possibilities frontier (PPF) and discusses marginal cost, emphasizing the cost of producing additional units. It also examines the shift to a vegetarian diet and the associated opportunity costs, encouraging viewers to analyze different scenarios.

In Scenario E, what was the average number of rabbits caught per day?

• 0 rabbits

• 1 rabbit

• 3 rabbits

• 2 rabbits

What is the opportunity cost of catching one more rabbit when moving from Scenario E to Scenario D?

• 50 berries

• 40 berries

• 20 berries

• 30 berries

What is the production possibilities frontier sometimes abbreviated as?

• FPP

• PPF

• PFP

• PFF

What happens to the production possibilities frontier when you want one more rabbit?

• It becomes unattainable

• It remains the same

• It drops off

• It increases

What term is used to describe the cost of producing one more unit in terms of what is given up?

• Fixed cost

• Variable cost

• Sunk cost

• Marginal cost

If you want to increase berries by 20 in Scenario E, what do you have to give up?

• 1 rabbit

• 2 rabbits

• 3 rabbits

• 4 rabbits

What is the opportunity cost of 20 more berries in Scenario E?

• 1 rabbit

• 2 rabbits

• 3 rabbits

• 4 rabbits

What is the marginal cost of one more berry in terms of rabbits?

• 1/10 of a rabbit

• 1/40 of a rabbit

• 1/30 of a rabbit

• 1/20 of a rabbit

What assumption is made about the curve when calculating the marginal cost of berries?

• It is exponential

• It is linear

• It is logarithmic

• It is quadratic

What should you consider when exploring different scenarios on the curve?

• The cost in terms of time

• The cost in terms of money

• The opportunity cost

• The fixed cost