-Refer to the above diagram.If society is currently producing the combination of bicycles and computers shown by point D,the production of 2 more units of bicycles:
A) cannot be realized because resources are fully employed.
B) will cost 1 unit of computers.
C) will cost 2 units of computers.
D) will cause some resources to become unemployed.

Question

-Refer to the above diagram.If society is currently producing the combination of bicycles and computers shown by point D,the production of 2 more units of bicycles:
A) cannot be realized because resources are fully employed. 
B) will cost 1 unit of computers. 
C) will cost 2 units of computers. 
D) will cause some resources to become unemployed.

Quizplus · Accepted Answer

The production possibility frontier (PPF) shows the combinations of two goods that can be produced with the given resources and technology. Point D is on the PPF, which means that society is currently producing the maximum possible amount of both bicycles and computers. If society wants to produce 2 more units of bicycles, it must give up some production of computers. The opportunity cost of producing 2 more units of bicycles is 1 unit of computers.

-Refer to the Above Diagram