The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4 Refer to Figure 1-4.If Country X were producing at point C, A)the opportunity cost of moving to point A is to give up an increase in the production of consumer goods. B)the opportunity cost of moving to point A is zero. C)the opportunity cost of moving to point A is to give up some capital goods. D)this is the maximum output possible from given resources. E)it is not possible to move to any point on PPB₁ or PPB₂ without technological progress.

Question

Quizplus · Accepted Answer

When Country X is producing at point C, the opportunity cost of moving to point A is to give up an increase in the production of consumer goods. This is because moving towards A involves diverting resources from the production of consumer goods to produce more capital goods.

The Diagram Below Shows Two Production Possibilities Boundaries for Country