FIGURE 1-5
-Refer to Figure 1-5.Suppose that the relevant production possibilities boundary is the one labelled B.This boundary implies that
A)the concept of opportunity cost is not at work in this economy.
B)the opportunity cost of producing either capital goods or consumer goods does not depend on how much of each good is produced.
C)consumer goods are preferred to capital goods.
D)in this society the resources are not efficiently employed.
E)capital goods are preferred to consumer goods.

Question

FIGURE 1-5
-Refer to Figure 1-5.Suppose that the relevant production possibilities boundary is the one labelled B.This boundary implies that
A)the concept of opportunity cost is not at work in this economy. 
B)the opportunity cost of producing either capital goods or consumer goods does not depend on how much of each good is produced. 
C)consumer goods are preferred to capital goods. 
D)in this society the resources are not efficiently employed. 
E)capital goods are preferred to consumer goods.

Quizplus · Accepted Answer

The production possibilities boundary (PPB) labelled B implies constant opportunity costs, meaning the opportunity cost of producing either capital goods or consumer goods does not change regardless of the quantity produced.

FIGURE 1-5 -Refer to Figure 1-5.Suppose That the Relevant Production Possibilities Boundary