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-(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If an economy is producing at X,the opportunity cost to it of producing at Y is _____ units of consumer goods per period.
A)2
B)1
C)6
D)18

Question

Use the following to answer question:

-(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If an economy is producing at X,the opportunity cost to it of producing at Y is _____ units of consumer goods per period.
A)2 
B)1 
C)6 
D)18

Quizplus · Accepted Answer

To find the opportunity cost of producing at Y when the economy is producing at X, we need to look at the amount of consumer goods that would be given up to produce one additional unit of capital goods. From X to Y, the economy would need to give up 3 units of consumer goods (decreasing from 17 to 14) to produce 1 additional unit of capital goods (increasing from 3 to 4). Therefore, the opportunity cost of producing at Y is 3 units of consumer goods per period. Choice C (6 units) is not a possible answer.

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