Following Is the Production Possibilities Schedule for an Economy Producing

question 57

Multiple Choice

Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.Table 2.1

-Refer to Table 2.1. Identify the correct statement.

• A)This economy can produce 100 units of A and 20 units of B.
• B)The opportunity cost of producing more of A decreases as A increases.
• C)The opportunity cost of producing more of B decreases as B increases.
• D)This economy can produce 70 units of A and 40 units of B.
• E)If this economy fully and efficiently employs all its resources, it can produce 100 units of A and 80 units of B.

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Definitions:

Marginal Productivity

The additional output that can be produced by adding one more unit of a specific input, holding all other inputs constant.

Diminishing

The process of lessening or decreasing in size, importance, or intensity.

Output

The quantity of goods or services produced by a business, individual, machine, or industry over a specified period.

Marginal Costs

Marginal costs refer to the increase or decrease in the total cost of producing one more unit of a good or service.