Table 2-1
Production Possibilities for Toyland

-Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of fire trucks from 0 to 200
A)50 dolls
B)100 dolls
C)150 dolls
D)200 dolls

Question

Table 2-1
Production Possibilities for Toyland
 
-Refer to Table 2-1.What is the opportunity cost to Toyland of increasing the production of fire trucks from 0 to 200
A)50 dolls 
B)100 dolls 
C)150 dolls 
D)200 dolls

Quizplus · Accepted Answer

To increase the production of fire trucks from 0 to 200, Toyland has to give up producing 100 dolls (moving from point A to point C on the production possibilities curve). Therefore, the opportunity cost of increasing the production of fire trucks from 0 to 200 is 100 dolls. This means that Toyland could produce 100 fewer dolls if it decides to produce 200 more fire trucks.

Table 2-1 Production Possibilities for Toyland