Figure 2-6

-Refer to Figure 2-6.If the economy is currently producing at point E, what is the opportunity cost of moving to point D?
A)13 thousand hammers
B)10 thousand hammers
C)8 thousand wrenches
D)0 wrenches

Question

Figure 2-6
 
-Refer to Figure 2-6.If the economy is currently producing at point E, what is the opportunity cost of moving to point D?
A)13 thousand hammers 
B)10 thousand hammers 
C)8 thousand wrenches 
D)0 wrenches

Quizplus · Accepted Answer

Moving from point E to point D means producing 4 thousand less hammers and 4 thousand more wrenches. Therefore, the opportunity cost of moving to point D is the 8 thousand wrenches that could have been produced with those 4 thousand hammers. Option C is the correct answer. Option A is incorrect because it does not consider the opportunity cost of producing 4 thousand less hammers. Option B is incorrect because it only considers the production of hammers and not wrenches. Option D is incorrect because producing 4 thousand more wrenches is the benefit of moving to point D, not the opportunity cost of producing hammers.

Figure 2-6 -Refer to Figure 2-6.If the Economy Is Currently Producing at Is