Table 3-15
The following table contains some production possibilities for an economy for a given month.

-Refer to Table 3-15.If the production possibilities frontier is a straight line,then "?" must be
A) 50.
B) 75.
C) 100.
D) 125.

Question

Table 3-15
The following table contains some production possibilities for an economy for a given month.
 
-Refer to Table 3-15.If the production possibilities frontier is a straight line,then "?" must be
A) 50. 
B) 75. 
C) 100. 
D) 125.

Quizplus · Accepted Answer

If the production possibilities frontier is a straight line, it means that the opportunity cost of producing one good in terms of the other remains constant. Therefore, the slope of the frontier is constant. In this case, the slope is (-100/50)=-2, which means that for every 1 unit of Good Y produced, the economy must give up 2 units of Good X. 
The maximum production possibility of Good X can be calculated as follows: 
100 = X - 2Y 
From this equation, we can see that the maximum production possibility of Good X is 100 units. Therefore, the answer is C.

Table 3-15 The Following Table Contains Some Production Possibilities for an Economy