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-(Figure: Guns and Butter)Use Figure: Guns and Butter.If the economy is operating at point B,producing 16 guns and 12 kilograms of butter per period,a decision to move to point E and produce 18 kilograms of butter:
A) indicates that you can have more butter and guns simultaneously.
B) makes it clear that this economy has decreasing opportunity costs.
C) necessitates a loss of 8 guns per period.
D) necessitates a loss of 4 guns per period.

Question

Use the following to answer questions: 
-(Figure: Guns and Butter)Use Figure: Guns and Butter.If the economy is operating at point B,producing 16 guns and 12 kilograms of butter per period,a decision to move to point E and produce 18 kilograms of butter:
A) indicates that you can have more butter and guns simultaneously. 
B) makes it clear that this economy has decreasing opportunity costs. 
C) necessitates a loss of 8 guns per period. 
D) necessitates a loss of 4 guns per period.

Quizplus · Accepted Answer

Moving from point B to point E requires reallocating resources to produce more butter, which results in producing fewer guns, specifically a loss of 8 guns per period.

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