Exhibit 2-8 Production Possibilities Frontier Data

Exhibit 2-8 Production possibilities frontier data

-Suppose an economy is faced with the production possibilities table shown in Exhibit 2-8.As additional units of capital goods are being produced,the number of consumption goods produced must _____,because _____.

A) increase; the production possibility table shows only the maximum efficiency points
B) increase; of the law of increasing costs
C) decrease; of the law of decreasing costs
D) decrease; of the finite nature of the resource base
E) increase; capital goods will assist in the production of consumer goods

Correct Answer:

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