ad nx Chapter 1: (x, y) (0, 1500) (100, 1440) 1500 (200, 1280) IV (300, 920) E 1

Question

ad nx Chapter 1: (x, y) (0, 1500) (100, 1440) 1500 (200, 1280) IV (300, 920) E 1000 (360, 500) 500 F (400, 0) 100 200 300 400 Tonnes of Bananas (x) produces two goods, cotton and bananas, both measured in tonnes produced per year. Suppose the economy is currently producing at point A. What is the opportunity cost to this economy of increasing production of bananas by 100 tonnes? A) there is no opportunity cost B) 60 tonnes of cotton C) 100 tonnes of cotton D) 1440 tonnes of bananas E) 1500 tonnes of bananas E 11 Refer to the figure above. A production possibilities boundary is shown for an economy that

Explanation / Answer

Option B is correct

Movement from point A to point B would mean an increase in production of bananas by 100 tonnes

The quantity of cotton forgone to increase the production of bananas (opportunity cost) = 1500 - 1440 = 60 tonnes

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