The following graph shows the production possibilities curve (PPC) of an economy that produces clothing and steel. The black points (plus symbols) represent three possible output levels in a given month. You can click on the points to see their exact coordinates. STEEL (Millions of tons) 24 21 15 12 6 3 0 0 PPC A + 100 150 + C 250 300 CLOTHING (Millions of garments) 3:30 4.00 (?) Suppose the economy initially produces 150 million garments of clothing and 15 million tons of steel, which is represented by point A. The opportunity cost of producing an additional 50 million garments of clothing (that is, producing at point B rather than at point A) is tons of steel. Suppose, instead, that the economy currently produces 200 million garments of clothing and 12.6 million tons of steel, which is represented by point B. Now the opportunity cost of producing an additional 50 million garments of clothing (that is, producing at point C rather than at point B) is ▼tons of steel. Comparing your answers in the previous questions suggests that the opportunity cost of producing 50 million additional garments of clothing at point B is the opportunity cost of producing 50 million additional garments of clothing at point A. This reflects the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Comparing your answers in the previous questions suggests that the opportunity cost of producing 50 million additional garments of clothing at point B is______ (choose between these: less than, greater than or equal to).

and

the opportunity cost of producing 50 million additional garments of clothing at point A. This reflects the________ (choose between: notion that countries can gain from trade, fact that resources are scarce or law of increasing opportunity costs)

The following graph shows the production possibilities curve (PPC) of an economy that produces clothing and steel. The black points
(plus symbols) represent three possible output levels in a given month. You can click on the points to see their exact coordinates.
STEEL (Millions of tons)
24
21
3
0
0
PPC
50
201
250
300
CLOTHING (Millions of garments)
100
150
3:20
4.00
(?
Suppose the economy initially produces 150 million garments of clothing and 15 million tons of steel, which is represented by point A.
The opportunity cost of producing an additional 50 million garments of clothing (that is, producing at point B rather than at point A) is
tons of steel.
Suppose, instead, that the economy currently produces 200 million garments of clothing and 12.6 million tons of steel, which is
represented by point B. Now the opportunity cost of producing an additional 50 million garments of clothing (that is, producing at point
C rather than at point B) is
▼tons of steel.
Comparing your answers in the previous questions suggests that the opportunity cost of producing 50 million additional garments of
clothing at point B is
the opportunity cost of producing 50 million additional garments of clothing at point A. This
reflects the

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So the last is it the fact that resources are scarce or law of increasing opportunity costs ? Cannot be both

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