A nation can produce two products: tanks and autos. The table below is the nation's production possibilities: Refer to the above table. If the nation produces more and more tanks, the opportunity cost of each additional tank in terms of autos:
A) Remains constant
B) Falls
C) Increases
D) Cannot be measured

Question

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:  Refer to the above table. If the nation produces more and more tanks, the opportunity cost of each additional tank in terms of autos:
A) Remains constant 
B) Falls 
C) Increases 
D) Cannot be measured

Quizplus · Accepted Answer

As the nation produces more and more tanks, it will have to allocate resources that are better suited for producing autos towards producing tanks. This will lead to a decrease in the production of autos and thus an increase in the opportunity cost of each additional tank in terms of autos. Therefore, the correct answer is C.

A Nation Can Produce Two Products: Tanks and Autos