Use the following to answer questions 52-54: Production Possibilities Schedule 1

Question

Use the following to answer questions 52-54:

Production Possibilities Schedule 1

Alternatives A B C D E F
Consumer goods per period 0 1 2 3 4 5
Capital goods per period 30 28 24 18 10 0


52. If the economy produces 2 units of consumer goods per period, it also can produce at most _______ units of capital goods per period.
A) 30
B) 28
C) 24 (i marked this one.. but not 100% sure - seems too obvious)
D) 18


53. If the economy produces 10 units of capital goods per period, it also can produce at most _______ unit(s) of consumer goods per period.
A) 5
B) 4 (I marked this one)
C) 3
D) 2

54. The opportunity cost of producing the fourth unit of consumer goods is ___ __ units of capital goods.
A) 2
B) 4
C) 6
D) 8

Explanation / Answer

52. You are right answer C is correct (its that easy :-) ) 53. Again you are correct, B is the right answer 54. To go from the 3rd unit of consumer goods to the 4th, you are giving up 8 units of capital goods (producing only 10 instead of 18). This is the opportunity cost, so the answer is D

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