Answer the question on the basis of the data given in the following production possibilities table: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $‾\underline{\text { Production Possibilities (Alternatives) }}$
$059121415\begin{array}{ccccccc}&\underline{A}&\underline{B}&\underline{C}& \underline{D} &\underline{E}&\underline{F} \\ \text { Capital Goods } &5&4&3&2&1&0\\\text { onsumer Goods } & 0 & 5 & 9 & 12 & 14 & 15 \end{array}$ Refer to the table.For these data,the law of increasing opportunity costs is reflected in the fact that:

A) the amount of consumer goods that must be sacrificed to get more capital goods diminishes beyond a point.
B) larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods.
C) the production possibilities data would graph as a straight downsloping line.
D) the economy's resources are presumed to be scarce.

Question

Answer the question on the basis of the data given in the following production possibilities table:

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‾\underline{\text { Production Possibilities (Alternatives) }}

059121415\begin{array}{ccccccc}&\underline{A}&\underline{B}&\underline{C}& \underline{D} &\underline{E}&\underline{F} \\ \text { Capital Goods } &5&4&3&2&1&0\\\text { onsumer Goods } & 0 & 5 & 9 & 12 & 14 & 15 \end{array}

Refer to the table.For these data,the law of increasing opportunity costs is reflected in the fact that:

A) the amount of consumer goods that must be sacrificed to get more capital goods diminishes beyond a point.
B) larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods.
C) the production possibilities data would graph as a straight downsloping line.
D) the economy's resources are presumed to be scarce.

Caroline Eidson · Accepted Answer

Final Answer : B, Explanation :  The law of increasing opportunity costs states that as an economy produces more of a particular good, the opportunity cost of producing an additional unit increases. In this table, as more capital goods are produced, larger and larger amounts of consumer goods must be sacrificed. This is reflected in the fact that the opportunity cost of producing an additional unit of capital goods increases as we move down the table. Choice A is incorrect because it suggests that the opportunity cost of producing capital goods decreases, which is opposite to the law of increasing opportunity costs. Choice C is incorrect because the production possibilities data would graph as a bowed-out curve, not a straight line. Choice D is also incorrect because the fact that resources are scarce is not specifically related to the law of increasing opportunity costs.

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