The accompanying figure shows the production possibilities curve for the island of Genovia:
If 500 cars are produced in Genovia, a maximum of ________ tons of agricultural products can be produced.
A)50,000
B)25,000
C)45,000
D)40,000

Question

The accompanying figure shows the production possibilities curve for the island of Genovia:   
If 500 cars are produced in Genovia, a maximum of ________ tons of agricultural products can be produced.
A)50,000 
B)25,000 
C)45,000 
D)40,000

Quizplus · Accepted Answer

Imagine Genovia is producing 50,000 tons of agricultural products and no cars. For every additional car that Genovia produces, it has to give up 50 tons of agricultural products. So if it produces 500 cars, then it has to give up 25,000 (= 500 × 50)tons of agricultural products. Since 50,000 - 25,000 = 25,000, this means that if Genovia produces 500 cars, a maximum of 25,000 tons of agricultural products can be produced.

The Accompanying Figure Shows the Production Possibilities Curve for the Island