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James Paul James Paul
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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. Suppose the economy is currently producing at point A. What is the opportunity cost to this economy of increasing the production of bananas by 100 tonnes?



▸ There is no opportunity cost.

▸ 60 tonnes of cotton

▸ 1500 tonnes of bananas

▸ 1440 tonnes of bananas

▸ 100 tonnes of cotton
Textbook 
Microeconomics

Microeconomics


Edition: 17th
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david200095367david200095367
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