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Exhibit 2-10 Production Possibilities Curve Data -Suppose an Economy Is Faced with the Production Possibilities Table

Question 120

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Exhibit 2-10 Production possibilities curve data  A  B  C  D  E  Capital goods 01234 Consumption goods 252319130\begin{array} { | l | r | r | r | r | r | } \hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Capital goods } & 0 & 1 & 2 & 3 & 4 \\\text { Consumption goods } & 25 & 23 & 19 & 13 & 0 \\\hline\end{array}
-Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10. As additional units of capital goods are being produced, the number of consumption goods produced must ____, because ____.


A) increase; the production possibility table shows only the maximum efficiency points
B) increase; of the law of increasing costs
C) decrease; of the law of increasing costs
D) decrease; of the finite nature of the resource base
E) increase; capital goods will assist in the production of consumer goods

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