question 17

question 17

Multiple Choice

• A) increase because the production possibility table shows only the maximum efficiency points.
• B) increase because of the law of increasing costs.
• C) decrease because of the law of increasing costs.
• D) decrease because of the finite nature of the resource base.

	A	B	C	D	E
Capital goods	0	1	2	3	4
Consumption goods	25	23	19	13	0

Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10. As additional units of capital goods are being produced, the number of consumption goods produced must:

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question 17

Multiple Choice

• A) increase because the production possibility table shows only the maximum efficiency points.
• B) increase because of the law of increasing costs.
• C) decrease because of the law of increasing costs.
• D) decrease because of the finite nature of the resource base.