-The Table Above Lists Six Points on the Production Possibilities

question 233

Multiple Choice

-The table above lists six points on the production possibilities frontier for grain and cars. From this information you can conclude that production is inefficient if this economy produces

• A) 6 tons of grain and 18 cars.
• B) 4 tons of grain and 26 cars.
• C) 2 tons of grain and 27 cars.
• D) 8 tons of grain and 10 cars.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, reflecting the potential benefits one misses out on when choosing one option over another.

Bowed Outward

Describes a curve on a graph, typically a production possibility frontier, indicating increasing opportunity costs when shifting resources between two goods.

Opportunity Cost

The cost of choosing one option over another, typically the best alternative forgone as a result of making a decision.

Efficient

Efficiency refers to the optimal production and distribution of resources in a way that best meets the needs and desires of consumers.