Suppose the economy initially produces 12 million gallons of drinking water and 500 million tons of coal, which is represented by point A. The opportunity cost of producing an additional 4 million gallons of drinking water (that is, moving production to point B) is tons of coal. Suppose, instead, that the economy currently produces 420 million tons of coal and 16 million gallons of drinking water, which is represented by point B. Now the opportunity cost of producing an additional 4 million gallons of drinking water (that is, moving to point C) is tons of coal. Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 4 million additional gallons of drinking water at point B is the opportunity cost of 4 million additional gallons of drinking water 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
icon
Related questions
Question
DRINKING WATER (Millions of gallons)
32
28
24 PPF
20
16
12
co
0
0
100
200
+o
B
➡00
300 400 500
COAL (Millions of tons)
600 700
800
(?
Transcribed Image Text:DRINKING WATER (Millions of gallons) 32 28 24 PPF 20 16 12 co 0 0 100 200 +o B ➡00 300 400 500 COAL (Millions of tons) 600 700 800 (?
Suppose the economy initially produces 12 million gallons of drinking water and 500 million tons of coal, which is represented by point A. The
opportunity cost of producing an additional 4 million gallons of drinking water (that is, moving production to point B) is
tons of coal.
Suppose, instead, that the economy currently produces 420 million tons of coal and 16 million gallons of drinking water, which is represented by point
B. Now the opportunity cost of producing an additional 4 million gallons of drinking water (that is, moving to point C) is
tons of coal.
Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 4 million additional gallons of drinking water at
point B is
the opportunity cost of 4 million additional gallons of drinking water at point A. This reflects the
Transcribed Image Text:Suppose the economy initially produces 12 million gallons of drinking water and 500 million tons of coal, which is represented by point A. The opportunity cost of producing an additional 4 million gallons of drinking water (that is, moving production to point B) is tons of coal. Suppose, instead, that the economy currently produces 420 million tons of coal and 16 million gallons of drinking water, which is represented by point B. Now the opportunity cost of producing an additional 4 million gallons of drinking water (that is, moving to point C) is tons of coal. Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 4 million additional gallons of drinking water at point B is the opportunity cost of 4 million additional gallons of drinking water at point A. This reflects the
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Production Possibility Frontier
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education