roblem: Scarcity and Choice 25 B 15 10 5. 0. 80 160 240 320 400 480 560 640 STEEL (Thousands of tons) Suppose the economy initially produces 15 million pounds of food and 400,000 tons of steel, which is represented by point A. The opportunity cost of producing an additional 5 million pounds of food (that is, moving production to point B) is tons of steel. Suppose, instead, that the economy currently produces 336,000 tons of steel and 20 million pounds of food, which is represented by point B. Now the opportunity cost of producing an additional 5 million pounds of food (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 million additional pounds of food at point B is the opportunity cost of 5 million additional pounds of food at point A. This reflects the CLOU O FOOD (Millions of pounds) 20

roblem: Scarcity and Choice 25 B 15 10 5. 0. 80 160 240 320 400 480 560 640 STEEL (Thousands of tons) Suppose the economy initially produces 15 million pounds of food and 400,000 tons of steel, which is represented by point A. The opportunity cost of producing an additional 5 million pounds of food (that is, moving production to point B) is tons of steel. Suppose, instead, that the economy currently produces 336,000 tons of steel and 20 million pounds of food, which is represented by point B. Now the opportunity cost of producing an additional 5 million pounds of food (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 million additional pounds of food at point B is the opportunity cost of 5 million additional pounds of food at point A. This reflects the CLOU O FOOD (Millions of pounds) 20

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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