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mickied mickied
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A year ago

Figure 1-7 shows the production possibilities boundary for an economy that produces two goods-cotton and bananas.

Short description: A graph plots tonnes of bananas against tonnes of cotton. Long description: The horizontal axis representing tonnes of bananas (x) ranges from 0 to 400, in increments of 100. The vertical axis representing tonnes of cotton (y) ranges from 0 to 1500, in increments of 500. The graph shows a curve that passes through the following points: A (0, 1500), B (100, 1440), C (200, 1280), D (300, 920), E (360, 500), and F (400, 0).

FIGURE 1-7

Refer to Figure 1-7. A production possibilities boundary is shown for an economy that produces two goods-cotton and bananas, both measured in tonnes produced per year. Which of the following statements best describes the difference in opportunity costs that this economy faces at point A compared to point E?



▸ The opportunity cost of producing an extra tonne of bananas is much lower at point A than at point E.

▸ The opportunity cost is 500 tonnes of cotton at point A, compared to 1500 tonnes at point E.

▸ The opportunity cost of producing an extra tonne of bananas is the same at point A as at point E.

▸ The opportunity cost is 1500 tonnes of cotton at point A, compared to 500 tonnes at point E.

▸ The opportunity cost of producing an extra tonne of bananas is much higher at point A than at point E.
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Microeconomics

Microeconomics


Edition: 17th
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lizwalkerlizwalker
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A year ago
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mickied Author
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A year ago
Thanks
acaruso
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Yesterday
Helped a lot
smdavis
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2 hours ago
Good timing, thanks!
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