Use the figure below to answer the following questions.

Figure 2.1.2
-Consider the production possibilities frontier in Figure 2.1.2. Which of the following statements is false?
A)Resources are not equally useful in all activities.
B)Points inside the production possibilities frontier indicate unused or misallocated resources.
C)Starting at point A, an increase in the production of Y will shift the production possibilities frontier outward.
D)The opportunity cost of producing Y increases as production of Y increases.
E)The opportunity cost of producing X increases as production of X increases.

Question

Use the figure below to answer the following questions.
  
Figure 2.1.2
-Consider the production possibilities frontier in Figure 2.1.2. Which of the following statements is false?
A)Resources are not equally useful in all activities. 
B)Points inside the production possibilities frontier indicate unused or misallocated resources. 
C)Starting at point A, an increase in the production of Y will shift the production possibilities frontier outward. 
D)The opportunity cost of producing Y increases as production of Y increases. 
E)The opportunity cost of producing X increases as production of X increases.

Quizplus · Accepted Answer

Option A is true because resources have varying degrees of usefulness in different activities. 
Option B is true because points inside the production possibilities frontier indicate that resources are not fully utilized or are misallocated. 
Option D is true because the opportunity cost of producing Y increases as the production of Y increases. 
Option E is true because the opportunity cost of producing X increases as the production of X increases. 
Option C is false because an increase in the production of Y from point A will not shift the production possibilities frontier outward since point A already represents the maximum production possibility given the available resources.

Use the Figure Below to Answer the Following Questions