Exhibit 2-8 Production possibilities curve data

A

B

C

D

E

F

Capital goods
15

14

12

9

5

0

Consumer goods
0

2

4

6

8

10

As shown in Exhibit 2-8, the concept of increasing opportunity costs is reflected in the fact that:

Question

Exhibit 2-8 Production possibilities curve data

	A	B	C	D	E	F
Capital goods	15	14	12	9	5	0
Consumer goods	0	2	4	6	8	10

As shown in Exhibit 2-8, the concept of increasing opportunity costs is reflected in the fact that:

Quizplus · Accepted Answer

The production possibilities curve in Exhibit 2-8 shows increasing opportunity costs, meaning that as more of one good is produced, increasing amounts of the other good must be sacrificed. This is reflected in the fact that as the production of consumer goods increases, more and more capital goods must be sacrificed. Therefore, the correct choice is C. Choice A is incorrect because the production possibilities curve shows that the quantity of consumer goods produced can be zero if all resources are devoted to the production of capital goods. Choice B is incorrect because the production possibilities curve does not reflect anything about the homogeneity of the labor force. Choice D is incorrect because the production possibilities curve is not necessarily a straight line and could be curved.

Exhibit 2-8 Production Possibilities Curve Data