The production possibilities table below shows the hypothetical relationship between the...

Question:

The production possibilities table below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy.

A B C D E
Guns 0 4 7 9 10
Butter 4 3 2 1 0

If the economy is producing at alternative C, what is the opportunity cost of producing another unit of butter?

A. 3 units of guns.

B. 1 units of guns.

C. 2 units of guns.

D. 4 units of guns.

Production Possibilities Table:

The production possibilities table list all the combinations of two outputs that can be produced by using all inputs available. An economy can product less output than what is listed in the table but that would be an inefficient outcome.

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer

Answer: A

The current level of production of butter is 2 units and we want to find out how much the production of guns will decrease to increase the...

See full answer below.


Learn more about this topic:

Loading...
Production Possibilities Curve: Definition & Examples

from

Chapter 11 / Lesson 28
34K

Understand what the production possibilities curve is, and learn how to construct and interpret a production possibilities curve along with the example.


Related to this Question

Explore our homework questions and answers library