The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4
-Refer to Figure 1-4.At point B,
A)the price of capital goods is higher than the price of consumer goods.
B)Country X is producing too many consumer goods and too few capital goods.
C)the price of consumer goods is equal to the price of capital goods.
D)the opportunity cost of producing an extra unit of capital goods is higher than at point A.
E)the opportunity cost of producing an extra unit of consumer goods is higher than at point A.

Question

The diagram below shows two production possibilities boundaries for Country X.  FIGURE 1-4
-Refer to Figure 1-4.At point B,
A)the price of capital goods is higher than the price of consumer goods. 
B)Country X is producing too many consumer goods and too few capital goods. 
C)the price of consumer goods is equal to the price of capital goods. 
D)the opportunity cost of producing an extra unit of capital goods is higher than at point A. 
E)the opportunity cost of producing an extra unit of consumer goods is higher than at point A.

Quizplus · Accepted Answer

At point B, the opportunity cost of producing an extra unit of consumer goods is higher than at point A because the production possibilities curve typically shows increasing opportunity costs as more of one good is produced.

The Diagram Below Shows Two Production Possibilities Boundaries for Country