Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S.capacity, ceteris paribus.Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers.
$\begin{array}{|c|c|c|c|c|}
\hline & \begin{array}{c}
\text { Number of } \
\text { Stealth } \
\text { Bombers }
\end{array} & \begin{array}{c}
\text { Opportunity Cost of } \
\text { Stealth Bombers in } \
\text { Terms of B-1 } \
\text { Bombers }
\end{array} & \begin{array}{c}
\text { Number of } \
\text { B-1 } \
\text { Bombers }
\end{array} & \begin{array}{c}
\text { Opportunity Cost of B- } \
\text { 1 Bombers in Terms of } \
\text { Stealth Bombers }
\end{array} \
\hline \text { A } & 195 & & 20 & \
\hline \text { B } & 180 & & 35 & \
\hline \text { C } & 150 & & 45 & \
\hline \text { D } & 100 & & 50 & \
\hline
\end{array}$
Table 1.2
Production Possibilities for Bombers On the basis of your calculations in Table 1.2, the law of increasing opportunity costs applies to
A) Both B
B) B
C) Stealth bombers but not to B
D) Neither bomber.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as you produce more of one good, the opportunity cost (in terms of the other good forgone) increases. This is because resources are not equally efficient in producing all goods. In the table, as we move from producing more Stealth bombers to more B-1 bombers (or vice versa), the number of bombers that must be given up increases, indicating that the opportunity cost of producing each additional unit of a bomber increases. This applies to both Stealth and B-1 bombers, as seen in the hypothetical trade-offs, where the shift from one production option to another involves increasing sacrifices of the alternative bomber.

Table 12 Shows the Hypothetical Trade-Off Between Different Combinations of Stealth