Following Is the Production Possibilities Schedule for an Economy Producing

question 96

Multiple Choice

Following is the production possibilities schedule for an economy producing two goods Good A and Good B.
Table 2.1
$\begin{array}{ccc}\text { Production Possibilities Schedule } \\\begin{array}{ccc}&\text { Good A }&\text { Good B }\\\text { Choice 1 } & 100 & 0 \\\text { Choice 2 } & 90 & 20 \\\text { Choice 3 } & 70 & 40 \\\text { Choice 4 } & 40 & 60 \\\text { Choice 5 } & 0 & 80\end{array}\end{array}$
-Refer to Table 2.1. According to the production possibilities schedule in the table above, which of the following statements is true?

• A) Moving from choice 2 to choice 3, the opportunity cost of 20 more B is 20 units of A.
• B) There are increasing opportunity costs associated with getting more B.
• C) Moving from choice 3 to choice 4, the opportunity cost of 20 more B is 30 units of A.
• D) Moving from choice 1 to choice 2, the opportunity cost of 20 more B is 10 units of A.
• E) All of these statements are true.

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Definitions:

Post Hoc, Ergo Propter Hoc

A logical fallacy that assumes a cause-and-effect relationship merely because one event followed another.

Unemployment Rate

The fraction of the workforce that is without a job and is actively searching for one.

Economic Model

A simplified framework designed to illustrate complex processes, frequently using mathematical techniques to analyze economic decisions and their impacts.

Inductive Reasoning

A method of reasoning that involves moving from specific observations to broader generalizations and theories.