Use the following diagram to answer the following questions.

-Refer to Housing. As we move down the production possibilities curve from point A to point C, there will be:

Question

Use the following diagram to answer the following questions.

-Refer to Housing. As we move down the production possibilities curve from point A to point C, there will be:

Quizplus · Accepted Answer

Moving down the production possibilities curve from point A to point C typically indicates that more of one good (in this case, cars) is being produced at the expense of another (e.g., housing). This results in an increase in the marginal cost (the cost of producing one additional unit) of cars because resources are likely becoming less efficiently used for car production as more cars are produced. Simultaneously, the marginal benefit (the additional satisfaction or utility gained from consuming one more unit) of cars decreases because as more cars are produced, the additional satisfaction from each extra car diminishes.

Use the Following Diagram to Answer the Following Questions