DRINKING WATER (Thousands of gallons) 40 35 is 30 25 20 15 10 5 0 PPF 090 C + B A 180 270 360 450 STEEL (Thousands of tons) 540 630 720 ? Suppose the economy initially produces 15,000 gallons of drinking water and 450,000 tons of steel, which is represented by point A. The opportunity cost of producing an additional 5,000 gallons of drinking water (that is, moving production to point B) is tons of steel. Suppose, instead, that the economy currently produces 378,000 tons of steel and 20,000 gallons of drinking water, which is represented by point B. Now the opportunity cost of producing an additional 5,000 gallons of drinking water (that is, moving to point C) is tons of steel. Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 5,000 additional gallons of drinking water at point B the opportunity cost of 5,000 additional gallons of drinking water at point A. This reflects the
Suppose the economy initially produces 15,000 gallons of drinking water and 450,000 tons of steel, which is represented by point A. The opportunity cost of producing an additional 5,000 gallons of drinking water (that is, moving production to point B) is (72,000, 135,000, 90,000, 54,000, 108,000) tons of steel
Suppose, instead, that the economy currently produces 378,000 tons of steel and 20,000 gallons of drinking water, which is represented by point B. Now the opportunity cost of producing an additional 5,000 gallons of drinking water (that is, moving to point C) is (72,000, 135,000, 90,000, 54,000, 108,000) ons of steel.
Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 5,000 additional gallons of drinking water at point B is (Less, Equal, Or Greater Than) the opportunity cost of 5,000 additional gallons of drinking water at point A. This reflects the (Notion that Countries can
Point A: 450,15
Point B: 378,20
Point C: 270,25
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