-Consulting Exhibit B-14, the opportunity cost of increasing production of capital from 2to 3 units is

Question

Quizplus · Accepted Answer

The opportunity cost of increasing production of capital from 2 to 3 units is 3 units of consumption goods. This is because, as shown in Exhibit B-14, producing 3 units of capital requires 6 units of resources, and producing 2 units of capital requires 3 units of resources. Therefore, the additional 3 units of resources required to produce the third unit of capital could have been used to produce 3 units of consumption goods.

-Consulting Exhibit B-14, the Opportunity Cost of Increasing Production of Capital