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

question 90

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 moves from point D to point F,where it is then producing bananas exclusively.Which of the following explanations best describes the opportunity cost involved in producing this extra 100 tonnes of bananas?

• A)The opportunity cost is very high in this case because resources that are probably much better suited to producing cotton are now being devoted to producing bananas.
• B)The opportunity cost is very low in this case because resources that are probably much better suited to producing cotton are now being devoted to producing bananas.
• C)The opportunity cost is very high in this case because resources that are probably much better suited to producing bananas are now being devoted to producing cotton.
• D)The opportunity cost is very low in this case because resources that are probably much better suited to producing bananas are now being devoted to producing cotton.
• E)The opportunity cost of producing the extra bananas is independent of the amount being produced.

---

Definitions:

Crisis Management Team

A group of individuals designated to plan for, respond to, and recover from emergency situations, ensuring the organization's resilience.

Quick Response

A strategy that emphasizes being responsive to customer demand to increase service quality and efficiency.

Effective Communication

The process of exchanging information in a way that is clearly understood by all parties involved.

Malcolm Baldridge National Quality Award

An award given by the U.S. government to recognize U.S. organizations for excellence in quality and performance.