Table 3-13
The following table contains some production possibilities for an economy for a given month.

-Refer to Table 3-13.If the production possibilities frontier is bowed outward,then "?" could be
A) 100.
B) 150.
C) 200.
D) 250.

Question

Table 3-13
The following table contains some production possibilities for an economy for a given month.
 
-Refer to Table 3-13.If the production possibilities frontier is bowed outward,then "?" could be
A) 100. 
B) 150. 
C) 200. 
D) 250.

Quizplus · Accepted Answer

If the production possibilities frontier is bowed outward, it means that the economy experiences increasing opportunity cost as it produces more of one good. Therefore, the maximum amount that can be produced of both goods will be at a point where the opportunity cost is equal. Looking at the table, the opportunity cost of producing 50 units of aluminum is giving up 20 units of copper (50-30=20), while the opportunity cost of producing 100 units of aluminum is giving up 50 units of copper (100-50=50). This means that the maximum amount that can be produced of both goods is at a point where aluminum production is 150 (between 100 and 200) and copper production is 70 (between 50 and 100). Therefore, the best choice is D, 250.

Table 3-13 The Following Table Contains Some Production Possibilities for an Economy