-At One Point Along a PPF, 50 Tons of Coffee

question 117

Multiple Choice

-At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is

• A) 1/2 of a ton of bananas.
• B) 2 tons of bananas.
• C) 7/5 of a ton of bananas.
• D) 5/7 of a ton of bananas.

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Definitions:

Price Inelastic

A situation where the demand for a good or service remains relatively unchanged despite changes in its price.

Consumption

The use of goods and services by households or individuals, often considered in terms of the total amount consumed in an economy.

Allocation of Resources

The process of distributing available resources among various uses to satisfy the needs and wants of the society.

Taxes

Financial charges imposed by a government on individuals, businesses, or other entities to fund public spending and various services.