Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S.capacity,ceteris paribus. Table 1.1
Production Possibilities for Bombers
$$\begin{array} { | l | c | c | c | c | }
\hline \text { Combination } & \begin{array} { c }
\text { Number of B- } \
1 \text { Bombers }
\end{array} & \begin{array} { c }
\text { Opportunity } \
\text { cost(Foregone } \
\text { Stealth) }
\end{array} & \begin{array} { c }
\text { Number of } \
\text { Stealth Bombers }
\end{array} & \begin{array} { c }
\text { Opportunity cost } \
\text { (Foregone B-1) }
\end{array} \
\hline \mathrm { S } & 0 & \text { NA } & 10 & \
\hline \mathrm { T } & 1 & & 9 & \
\hline \mathrm { U } & 2 & & 7 & \
\hline \mathrm { V } & 3 & & 4 & \text { NA } \
\hline
\end{array}$$ On the basis of Table 1.1,you may infer that the law of increasing opportunity costs applies to increasing production of
A)Stealth bombers but not to B-1 bombers.
B)B-1 bombers.
C)Both B-1 bombers and Stealth Bombers.
D)Neither B-1 bombers or Stealth Bombers.

Question

Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S.capacity,ceteris paribus. Table 1.1
Production Possibilities for Bombers
$$\begin{array} { | l | c | c | c | c | } 
\hline \text { Combination } & \begin{array} { c } 
\text { Number of B- } \
1 \text { Bombers }
\end{array} & \begin{array} { c } 
\text { Opportunity } \
\text { cost(Foregone } \
\text { Stealth) }
\end{array} & \begin{array} { c } 
\text { Number of } \
\text { Stealth Bombers }
\end{array} & \begin{array} { c } 
\text { Opportunity cost } \
\text { (Foregone B-1) }
\end{array} \
\hline \mathrm { S } & 0 & \text { NA } & 10 & \
\hline \mathrm { T } & 1 & & 9 & \
\hline \mathrm { U } & 2 & & 7 & \
\hline \mathrm { V } & 3 & & 4 & \text { NA } \
\hline
\end{array}$$ On the basis of Table 1.1,you may infer that the law of increasing opportunity costs applies to increasing production of
A)Stealth bombers but not to B-1 bombers.
B)B-1 bombers.
C)Both B-1 bombers and Stealth Bombers.
D)Neither B-1 bombers or Stealth Bombers.

Quizplus · Accepted Answer

The law of increasing opportunity cost states that as production of one good increases, the opportunity cost of producing an additional unit of that good increases. In this case, as production of Stealth bombers increases, the opportunity cost of producing an additional Stealth bomber increases in terms of the number of B-1 bombers that must be foregone. Similarly, as production of B-1 bombers increases, the opportunity cost of producing an additional B-1 bomber increases in terms of the number of Stealth bombers that must be foregone. Therefore, the law of increasing opportunity cost applies to both B-1 bombers and Stealth bombers.

Table 11 Shows the Hypothetical Trade-Off Between Different Combinations of Stealth