Table 2-1
Production Possibilities for Toyland

-Refer to Table 2-1.How does the opportunity cost of producing an additional 100 dolls change as more dolls are produced
A)It is constant and equal to 50 fire trucks.
B)It is constant and equal to 100 fire trucks.
C)It decreases as more dolls are produced.
D)It increases as more dolls are produced.

Question

Table 2-1
Production Possibilities for Toyland
 
-Refer to Table 2-1.How does the opportunity cost of producing an additional 100 dolls change as more dolls are produced
A)It is constant and equal to 50 fire trucks. 
B)It is constant and equal to 100 fire trucks. 
C)It decreases as more dolls are produced. 
D)It increases as more dolls are produced.

Quizplus · Accepted Answer

The opportunity cost of producing an additional 100 dolls increases as more dolls are produced. This is because resources that are better suited for producing fire trucks have to be diverted to produce additional dolls. Therefore, each additional 100 dolls produced will require a larger sacrifice of fire trucks.

Table 2-1 Production Possibilities for Toyland