Exhibit 2-6 Production Possibilities Curve Data -In Exhibit 2-6, the Concept of Increasing Opportunity Costs Is

question 98

Multiple Choice

Exhibit 2-6 Production possibilities curve data $$\begin{array} { | l | r | r | r | r | r | r | } \hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & { \text { F } } \\\hline \text { Capital goods } & 150 & 140 & 120 & 90 & 50 & 0 \\\text { Consume goods } & 0 & 20 & 40 & 60 & 80 & 100 \\\hline\end{array}$$
-In Exhibit 2-6, the concept of increasing opportunity costs is represented by the fact that:

• A) the quantity of capital goods produced must be less than 150.
• B) the quantity of consumer goods is constant for each change in the quantity of capital goods produced.
• C) greater amounts of capital goods must be sacrificed to produce each additional unit of consumer goods.
• D) the amount of consumer goods produced must be greater than zero.

Understand and calculate consumer surplus.

Recognize the role of price in consumer demand and surplus.

Apply concepts of utility to analyze consumer demand schedules.

Grasp the principle of diminishing marginal utility.

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