-According to this production possibilities table, the opportunity cost of going from 120 to 160 million units of consumer goods is:
A) 16 million units of capital goods.
B) 20 million units of capital goods.
C) 36 million units of capital goods.
D) 40 million units of capital goods.

Question

-According to this production possibilities table, the opportunity cost of going from 120 to 160 million units of consumer goods is:
A) 16 million units of capital goods. 
B) 20 million units of capital goods. 
C) 36 million units of capital goods. 
D) 40 million units of capital goods.

Quizplus · Accepted Answer

The opportunity cost of going from 120 to 160 million units of consumer goods is 20 million units of capital goods. This is because the production possibilities table shows that at 120 million units of consumer goods, the economy can produce 140 million units of capital goods. At 160 million units of consumer goods, the economy can produce 120 million units of capital goods. Therefore, the opportunity cost of going from 120 to 160 million units of consumer goods is 140 - 120 = 20 million units of capital goods.

-According to This Production Possibilities Table, the Opportunity Cost of Going