-Refer to Table 2-1. How does the opportunity cost of producing an additional 100 toy cars change as more toy cars are produced?
A) It is constant and equal to 50 dolls.
B) It is constant and equal to 100 dolls.
C) It decreases as more toy cars are produced.
D) It increases as more toy cars are produced.

Question

-Refer to Table 2-1. How does the opportunity cost of producing an additional 100 toy cars change as more toy cars are produced?
A) It is constant and equal to 50 dolls. 
B) It is constant and equal to 100 dolls. 
C) It decreases as more toy cars are produced. 
D) It increases as more toy cars are produced.

Quizplus · Accepted Answer

The opportunity cost of producing an additional 100 toy cars increases as more toy cars are produced because resources are not equally suited to producing both goods, leading to increasing sacrifices in the production of the other good (dolls) as more toy cars are produced.