Table 1.4

-Assume that our national economy is operating at a point on its bowed-out production possibilities curve. According to the production possibilities schedule in Table 1.4, if our nation produces more of Good A, then:

Question

Table 1.4
 
-Assume that our national economy is operating at a point on its bowed-out production possibilities curve. According to the production possibilities schedule in Table 1.4, if our nation produces more of Good A, then:

Quizplus · Accepted Answer

According to the bowed-out shape of the production possibilities curve, producing more of Good A means moving along the curve, which involves sacrificing increasingly larger amounts of Good B. This is because the resources used to produce both goods are not equally efficient in producing both goods, and as more resources are devoted to producing Good A, the marginal opportunity cost of producing each additional unit of Good A increases.

Table 1.4 -Assume That Our National Economy Is Operating at a Point