Figure: Production Possibility Frontier Curve for Tealand

question 79

Essay

Figure: Production Possibility Frontier Curve for Tealand
(Figure: Production Possibility Frontier for Tealand) Look at the figure Production Possibility Frontier for Tealand.In the figure, Tealand is producing at point C on its production possibility frontier.What is the opportunity cost in Tealand of increasing the production of tea from 20
million cups to 30 million cups?
A.10 million cups of tea
B.5 million scones
C.10 million scones
D.The answer is impossible to determine from the information given.

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Definitions:

Price Decreases

Reductions in the cost of goods or services, often leading to increased demand.

Normal Goods

Goods for which demand increases as the income of individuals increases, indicating a positive relationship between income and demand.

Equilibrium Price

This is the price at which the quantity of goods supplied matches the quantity of goods demanded, resulting in market equilibrium.

Demand Curve

A graph depicting the relationship between the price of a good and the quantity demanded by consumers at those prices.