These data reflect three possible combinations of food and clothing that can be produced from a given set of resources. Refer to the above data.If the PPF has its normal bowed-out shape, X will be
A)25.
B)more than 25.
C)less than 25.
D)5.
E)cannot be determined from the data given

Question

These data reflect three possible combinations of food and clothing that can be produced from a given set of resources.  Refer to the above data.If the PPF has its normal bowed-out shape, X will be
A)25. 
B)more than 25. 
C)less than 25. 
D)5. 
E)cannot be determined from the data given

Quizplus · Accepted Answer

If the PPF has a normal bowed-out shape, it indicates that the economy experiences increasing opportunity costs as it produces more of one good. Therefore, to produce an additional unit of food, the economy must sacrifice an increasing amount of clothing. From the data given, we can see that the economy can produce maximum combinations of (10,10), (15,7), and (20,2). Therefore, the opportunity cost of producing an additional unit of food is highest when the economy is already producing 20 units of food and 2 units of clothing. Thus, X, the amount of food that can be produced when all resources are dedicated to food production, must be more than 20 and less than 25. Therefore, the best choice is B.

These Data Reflect Three Possible Combinations of Food and Clothing