Refer to the diagram below.Points A,B,C,D,and E show:
A) that the opportunity cost of bicycles increases,while that of computers is constant.
B) combinations of bicycles and computers which society can produce by using its resources efficiently.
C) that the opportunity cost of computers increases,while that of bicycles is constant.
D) that society's demand for computers is greater than its demand for bicycles.

Question

Refer to the diagram below.Points A,B,C,D,and E show: 
A) that the opportunity cost of bicycles increases,while that of computers is constant. 
B) combinations of bicycles and computers which society can produce by using its resources efficiently. 
C) that the opportunity cost of computers increases,while that of bicycles is constant. 
D) that society's demand for computers is greater than its demand for bicycles.

Quizplus · Accepted Answer

The diagram shows the production possibilities frontier, which illustrates the combinations of two goods that can be produced with a given set of resources. The points on the curve (A, B, C, D, and E) show efficient use of resources, meaning that society is producing the maximum possible output of both bicycles and computers. Therefore, the answer is B, which describes the combinations of bicycles and computers that society can produce efficiently. The diagram does not provide any information about changes in opportunity cost or relative demand for bicycles and computers.

Refer to the Diagram Below