A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule: Refer to the above table. In moving stepwise from possibility A to B to C … to F, the opportunity cost of a unit of steel in terms of wheat:
A) Increases
B) Decreases
C) Remains constant
D) Increases at first then decreases

Question

A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule:  Refer to the above table. In moving stepwise from possibility A to B to C … to F, the opportunity cost of a unit of steel in terms of wheat:
A) Increases 
B) Decreases 
C) Remains constant 
D) Increases at first then decreases

Quizplus · Accepted Answer

Moving from possibility A to F, the amount of steel produced increases while the amount of wheat produced decreases. This means that more and more resources are being shifted towards steel production, leading to an opportunity cost of wheat that increases. Therefore, the answer is A) Increases.

A Nation Can Produce Two Products: Steel and Wheat