The Production Possibilities Curve Below Shows the Hypothetical Relationship Between

question 19

Multiple Choice

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the above table.What is the total opportunity cost of producing three units of capital goods?

• A)6 units of consumer goods
• B)7 units of consumer goods
• C)15 units of consumer goods
• D)22 units of consumer goods

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Definitions:

Decreasing Returns

Refers to a situation in which adding more of a production factor, such as labor or capital, results in progressively smaller increases in output.

Direct Price Discrimination

A pricing strategy where a seller adjusts prices for different customers based on observable personal characteristics or willingness to pay.

Elastic Demand

A situation where the demand for a good or service greatly changes in response to changes in price.

Direct Price Discrimination

A pricing strategy where a seller charges different prices to different customers for the same product or service, based on their willingness to pay.