Table 2.1.1
The following table gives points on the production possibilities frontier for goods X and Y.

-From the data in Table 2.1.1 we can infer that
A)the economy illustrated has a comparative advantage in the production of Y.
B)the economy illustrated has a comparative advantage in the production of X.
C)the opportunity cost of producing an additional unit of Y increases as the production of Y increases.
D)the opportunity cost of producing an additional unit of Y decreases as the production of Y increases.
E)none of the above.

Question

Table 2.1.1
The following table gives points on the production possibilities frontier for goods X and Y.

-From the data in Table 2.1.1 we can infer that
A)the economy illustrated has a comparative advantage in the production of Y. 
B)the economy illustrated has a comparative advantage in the production of X. 
C)the opportunity cost of producing an additional unit of Y increases as the production of Y increases. 
D)the opportunity cost of producing an additional unit of Y decreases as the production of Y increases. 
E)none of the above.

Quizplus · Accepted Answer

As the production of Y increases, the production of X decreases, indicating that the resources used to produce Y could have been otherwise used to produce X. This implies that the opportunity cost of producing an additional unit of Y increases as the production of Y increases. Therefore, option C is the correct inference. Option A and B cannot be inferred from the given data since it does not provide any information about the comparative advantage of the economy. Option D is also incorrect since it contradicts the actual interpretation of the data.

Table 2.1.1 The Following Table Gives Points on the Production Possibilities Frontier