e graph below represents the Production Possibility Frontier of the U.S. The red

Question

e graph below represents the Production Possibility Frontier of the U.S. The red line represents e rate at which we can trade other goods in exchange for energy (such as oil or natural gas) U.S. PPF 130 120 110 100A 90 80 70 60 20 10O 0 20 80 100 120 Energy (Quadrillion BTUs per period) Suppose we start out at point A, producing and consuming 60 units of energy per period, but we decide w consume 80 units of energy per period instead. If we produce those additional 20 units domestically (moving from A 40 units of other goods, but if we import those to C on the graph) we sacrifice

Explanation / Answer

11) the correct option is d) because now to produce additional units of energ we have to sacrifice more of expenditure done on other goods as is depicted by the slope of ppf. (Tanget to ppf will be more steeper copared to that at 60)

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