Question

Explain why, in an economy that
produces only fish and computers and is working at efficiency,
the 500th computer made will cost more in terms of fish than the
450th computer made.

Answer 1

The 500th computer made will cost more in terms of fish than the 450th computer made, because there are opportunity costs. ... When we start to produce more computer and less fish, we will increase opportunity costs. This occurs because we will use more resources to increase production of computer.