QUESTION Table 2-5 Cookies (in dozens) 1000 800 600 400 200 0 Coffee (in pounds)

Question

QUESTION Table 2-5 Cookies (in dozens) 1000 800 600 400 200 0 Coffee (in pounds) 350 650 1000 1050 Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following statements is correct? a. The opportunity cost of a pound of coffee decreases as more coffee is produced b. The opportunity cost of a dozen cookies increases as more cookies are produced. c. The opportunity cost of a dozen cookies does not depend on how many pounds of coffee are being produced. d. The opportunity cost of a dozen cookies decreases as more cookies are produced.

Explanation / Answer

Answer:- Table 2-5 shows one set of production possibilities. which of the following statements is correct

Correct option:- B:- The opportunity cost of a dozen of cookies increases as more cookies are produced.

Reason:-

From table, it is clear that as more cookies are produced, the opportunity cost increases while if the production of coffee is increased then opportunity cost remains same.

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Coffees Cookies Opportunity cost for increasing coffee production Opportunity cost for increasing coffee production 1000 0 350 800 350 300 200 600 650 250 200 400 900 100 200 200 1000 50 200 0 1050 200

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