The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 3
-Refer to Figure 1- 3. At point B,
A) the opportunity cost of producing an extra unit of consumption goods is higher than at point A.
B) the price of capital goods is higher than the price of consumption goods.
C) the opportunity cost of producing an extra unit of capital goods is higher than at point A.
D) Country X is producing too many consumption goods and too few capital goods.
E) the price of consumption goods is equal to the price of capital goods.

Question

The diagram below shows two production possibilities boundaries for Country X.  FIGURE 1- 3
-Refer to Figure 1- 3. At point B,
A) the opportunity cost of producing an extra unit of consumption goods is higher than at point A. 
B) the price of capital goods is higher than the price of consumption goods. 
C) the opportunity cost of producing an extra unit of capital goods is higher than at point A. 
D) Country X is producing too many consumption goods and too few capital goods. 
E) the price of consumption goods is equal to the price of capital goods.

Quizplus · Accepted Answer

At point B, the opportunity cost of producing an extra unit of consumption goods is higher than at point A because the production possibilities curve typically reflects increasing opportunity costs as more of one good is produced.

The Diagram Below Shows Two Production Possibilities Boundaries for Country