Figure 2-9
Panel (a)Panel (b)
-Refer to Figure 2-9,Panel (a).In order to gain 2 radios by moving from point S to point T,society must sacrifice

Question

Figure 2-9
Panel (a)Panel (b)  
-Refer to Figure 2-9,Panel (a).In order to gain 2 radios by moving from point S to point T,society must sacrifice

Quizplus · Accepted Answer

From point S to point T, society must move along the production possibilities frontier (PPF) which shows the maximum combinations of two goods that can be produced with the given resources and technology, given the assumption of full employment and efficiency. Moving from point S to point T means society is sacrificing some of one good to produce more of the other. In this case, society is sacrificing 2 televisions to gain 1 radio on the PPF. Therefore, to gain 2 radios, society must sacrifice 6 televisions (3 times as many TVs as the gain in radios) as shown by the movement from point S to point T. Hence, the correct answer is A) 6 televisions.