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. (? 40 35 B 0 90 720 380 450 540 630 STEEL (Millions of tons) Suppose the economy initially produces 15,000 pieces of clothing and 450 million tons of steel, which is represented by point A. The opportunity cost of producing an additional 5,000 pieces of clothing (that is, moving production to point B) is_ tons of steel. (A. 54 million, B. 72 Million, C. 90 Million, D. 108 Million. E. 135 Million) Suppose, instead, that the economy currently produces 378 million tons of steel and 20,000 pieces of clothing, which is represented by point B. Now the opportunity cost of producing an additional 5,000 pieces of clothing (that is, moving to point C) is_____ tons of steel. (A. 54 Million B. 72 Million C. 90 million E. 108 Million E.135 Million) Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 5,000 additional pieces of clothing at point B is _______ the opportunity cost of 5,000 additional pieces of clothing at point A. (A.greater than B. Less than C. Equal to) CLOTHING (Thousands of pieces) 5 0 PPC C 180 270
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. (? 40 35 B 0 90 720 380 450 540 630 STEEL (Millions of tons) Suppose the economy initially produces 15,000 pieces of clothing and 450 million tons of steel, which is represented by point A. The opportunity cost of producing an additional 5,000 pieces of clothing (that is, moving production to point B) is_ tons of steel. (A. 54 million, B. 72 Million, C. 90 Million, D. 108 Million. E. 135 Million) Suppose, instead, that the economy currently produces 378 million tons of steel and 20,000 pieces of clothing, which is represented by point B. Now the opportunity cost of producing an additional 5,000 pieces of clothing (that is, moving to point C) is_____ tons of steel. (A. 54 Million B. 72 Million C. 90 million E. 108 Million E.135 Million) Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 5,000 additional pieces of clothing at point B is _______ the opportunity cost of 5,000 additional pieces of clothing at point A. (A.greater than B. Less than C. Equal to) CLOTHING (Thousands of pieces) 5 0 PPC C 180 270
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text: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.
(?)
40
35
B
0
90
180 270 380 450 540 630 720
STEEL (Millions of tons)
Suppose the economy initially produces 15,000 pieces of clothing and 450 million tons of steel, which is
represented by point A. The opportunity cost of producing an additional 5,000 pieces of clothing (that is,
moving production to point B) is_ tons of steel. (A. 54 million, B. 72 Million, C. 90 Million, D. 108 Million.
E. 135 Million)
Suppose, instead, that the economy currently produces 378 million tons of steel and 20,000 pieces of
clothing, which is represented by point B. Now the opportunity cost of producing an additional 5,000
pieces of clothing (that is, moving to point C) is_____ tons of steel. (A. 54 Million B. 72 Million C. 90 million E.
108 Million E.135 Million)
Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 5,000
additional pieces of clothing at point B is ________ the opportunity cost of 5,000 additional pieces of clothing
at point A. (A.greater than B. Less than C. Equal to)
CLOTHING (Thousands of pieces)
5
0
PPC
C
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