The following economy produces two products. Refer to the above table.The opportunity cost of each additional tank in terms of autos:
A) remains constant.
B) falls as more tanks are produced.
C) increases as more tanks are produced.
D) cannot be measured because there is no currency.

Question

The following economy produces two products.  Refer to the above table.The opportunity cost of each additional tank in terms of autos:
A) remains constant. 
B) falls as more tanks are produced. 
C) increases as more tanks are produced. 
D) cannot be measured because there is no currency.

Quizplus · Accepted Answer

The opportunity cost of one tank in terms of autos increases as more tanks are produced, indicating that the economy faces increasing opportunity costs as it specializes in the production of tanks. This is because the production of each additional tank requires more and more resources that could be used to produce autos, resulting in a higher opportunity cost.

The Following Economy Produces Two Products