The following graph shows the production possibilities frontier (PPF) of an economy that produces clothing and steel. The black points (plus symbols) represent three possible output levels in a given month. Point A is at (500, 12); B is at (420, 16) and C is at (300, 20). CLOTHING (Millions of pieces) 32 28 24 8 16 12 8 4 0 0 PPF 100 200 tons of steel. 15 B 300 400 500 STEEL (Millions of tons) 600 700 800 Suppose the economy initially produces 12 million pieces of clothing and 500 million tons of steel, which is represented by point A. The opportunity cost of producing an additional 4 million pieces of clothing (that is, moving production to point B) is [Select] tons of steel. Suppose, instead, that the economy currently produces 420 million tons of steel and 16 million pieces of clothing, which is represented by point B. Now the opportunity cost of producing an additional 4 million pieces of clothing (that is, moving to point C) is [Select] Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 4 million additional pieces of clothing at point B is [Select] the opportunity cost of 4 million additional pieces of clothing at point A. This reflects the
The following graph shows the production possibilities frontier (PPF) of an economy that produces clothing and steel. The black points (plus symbols) represent three possible output levels in a given month. Point A is at (500, 12); B is at (420, 16) and C is at (300, 20). CLOTHING (Millions of pieces) 32 28 24 8 16 12 8 4 0 0 PPF 100 200 tons of steel. 15 B 300 400 500 STEEL (Millions of tons) 600 700 800 Suppose the economy initially produces 12 million pieces of clothing and 500 million tons of steel, which is represented by point A. The opportunity cost of producing an additional 4 million pieces of clothing (that is, moving production to point B) is [Select] tons of steel. Suppose, instead, that the economy currently produces 420 million tons of steel and 16 million pieces of clothing, which is represented by point B. Now the opportunity cost of producing an additional 4 million pieces of clothing (that is, moving to point C) is [Select] Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 4 million additional pieces of clothing at point B is [Select] the opportunity cost of 4 million additional pieces of clothing at point A. This reflects the
Chapter2: Economic Tools And Economic Systems
Section: Chapter Questions
Problem 3.5P
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![The following graph shows the production possibilities frontier (PPF) of an economy that produces
clothing and steel. The black points (plus symbols) represent three possible output levels in a given
month. Point A is at (500, 12); B is at (420, 16) and C is at (300, 20).
CLOTHING (Millions of pieces)
32
28
24
20
16
12
8
V
0
PPF
100
200
15
B+
+>
300
400
500
STEEL (Millions of tons)
600
700
800
Suppose the economy initially produces 12 million pieces of clothing and 500 million tons of steel,
which is represented by point A. The opportunity cost of producing an additional 4 million pieces of
clothing (that is, moving production to point B) is [Select]
tons of steel.
Suppose, instead, that the economy currently produces 420 million tons of steel and 16 million
pieces of clothing, which is represented by point B. Now the opportunity cost of producing an
additional 4 million pieces of clothing (that is, moving to point C) is [Select]
tons of steel.
Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of
4 million additional pieces of clothing at point B is [Select]
the opportunity
cost of 4 million additional pieces of clothing at point A. This reflects the](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7be3a562-9c07-42b9-a8c9-90ff9fa9e728%2F8541a49c-303e-4dc8-9535-9fe2fea147d0%2Fxroisyi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following graph shows the production possibilities frontier (PPF) of an economy that produces
clothing and steel. The black points (plus symbols) represent three possible output levels in a given
month. Point A is at (500, 12); B is at (420, 16) and C is at (300, 20).
CLOTHING (Millions of pieces)
32
28
24
20
16
12
8
V
0
PPF
100
200
15
B+
+>
300
400
500
STEEL (Millions of tons)
600
700
800
Suppose the economy initially produces 12 million pieces of clothing and 500 million tons of steel,
which is represented by point A. The opportunity cost of producing an additional 4 million pieces of
clothing (that is, moving production to point B) is [Select]
tons of steel.
Suppose, instead, that the economy currently produces 420 million tons of steel and 16 million
pieces of clothing, which is represented by point B. Now the opportunity cost of producing an
additional 4 million pieces of clothing (that is, moving to point C) is [Select]
tons of steel.
Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of
4 million additional pieces of clothing at point B is [Select]
the opportunity
cost of 4 million additional pieces of clothing at point A. This reflects the
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