The economy illustrated by the data in Table 2.1.1 exhibits
A)decreasing opportunity cost.
B)constant opportunity cost in the production of X.
C)constant opportunity cost in the production of Y.
D)increasing opportunity cost.
E)initially increasing,then decreasing opportunity cost.

Question

Quizplus · Accepted Answer

The table shows that as more units of X are produced, the opportunity cost of producing an additional unit of X increases (from 2 to 4), indicating that resources are not perfectly adaptable to the production of both goods. This means the economy exhibits increasing opportunity cost.

The Economy Illustrated by the Data in Table 2