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Figure: Strawberries and Submarines II
-(Figure: Strawberries and Submarines II)Use Figure: Strawberries and Submarines II.Assume that the economy is operating at point A.The opportunity cost of moving to point C is equal to _____ million tonnes of strawberries:
A) 800
B) 200
C) 2
D) 50

Question

Use the following to answer questions:
Figure: Strawberries and Submarines II 
-(Figure: Strawberries and Submarines II)Use Figure: Strawberries and Submarines II.Assume that the economy is operating at point A.The opportunity cost of moving to point C is equal to _____ million tonnes of strawberries:
A) 800 
B) 200 
C) 2 
D) 50

Quizplus · Accepted Answer

Moving from point A to point C involves a trade-off of 2 million tonnes of submarines for 200 million tonnes of strawberries. The opportunity cost of increasing strawberry production from 400 to 600 million tonnes is 2 million tonnes of submarines (the difference between the two points on the PPF). Therefore, the best choice would be to move to point C, as it results in a significant gain in strawberry production with a relatively small opportunity cost in terms of submarines.

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