Figure 1-7 Shows the Production Possibilities Boundary for an Economy

question 112

Multiple Choice

Figure 1-7 shows the production possibilities boundary for an economy that produces two goods - cotton and bananas. FIGURE 1-7
-Refer to Figure 1-7.A production possibilities boundary is shown for an economy that produces two goods - cotton and bananas,both measured in tonnes produced per year.Suppose this economy is currently producing 1280 tonnes of cotton and 200 tonnes of bananas.What is the opportunity cost of increasing production of bananas by 100 tonnes?

• A)100 tonnes of cotton
• B)360 tonnes of cotton
• C)360 tonnes of bananas
• D)920 tonnes of cotton
• E)there is no opportunity cost

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Definitions:

Doctrine

A principle or body of principles held by a legal, political, or philosophical system, often serving as a guideline for decision-making.

Commercial Impracticability

A legal principle under the Uniform Commercial Code (UCC) that excuses a party from performing a contract when an unforeseen event makes performance extremely difficult or expensive.

Impossibility

A situation or condition in which something cannot be done or achieved, often due to external factors.

Carrier

An individual or organization in the business of transporting goods or people.