A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. The marginal opportunity cost of the fourth unit of tanks is:
A) 4 units of tanks
B) 300 units of autos
C) 350 units of autos
D) 1000 units of autos

Question

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:  Refer to the above table. The marginal opportunity cost of the fourth unit of tanks is:
A) 4 units of tanks 
B) 300 units of autos 
C) 350 units of autos 
D) 1000 units of autos

Quizplus · Accepted Answer

The marginal opportunity cost of the fourth unit of tanks is the change in the number of autos produced when one more unit of tanks is produced. From the table, we can see that producing the fourth unit of tanks requires a decrease in the production of autos from 600 to 300 units. Therefore, the marginal opportunity cost of the fourth unit of tanks is 300 units of autos. The best choice would depend on the specific needs and preferences of the nation, but producing up to 3 units of tanks and 600 units of autos would be the most efficient use of resources.

A Nation Can Produce Two Products: Tanks and Autos