The Production Possibilities Table Below Shows the Hypothetical Relationship Between

question 96

Multiple Choice

The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the table above.What is the opportunity cost of producing the third unit of capital goods?

• A) 4 units of consumer goods
• B) 5 units of consumer goods
• C) 6 units of consumer goods
• D) 7 units of consumer goods Going from C to D is a one-unit increase in capital goods and it costs 6 units of consumer goods (from 13 down to 7).

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Definitions:

Security Guard

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Prisoner's Dilemma

A situation in game theory where two individuals acting in their own self-interest do not produce the optimal outcome, showing the conflict between personal and collective rationality.

Nash Equilibrium

An idea in game theory stating that no participant can gain an advantage by altering their strategy if all other participants maintain their current strategies.

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