Narrbegin Exhibit 2 Narrend
-Suppose an Economy Is Faced with the Production Possibilities

Narrbegin Exhibit 2.8 Production possibilities frontier data
$\begin{array}{|l|r|r|r|r|r|}\hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Capital goods } & 0 & 1 & 2 & 3 & 4 \\\hline \text { Consumption goods } & 25 & 23 & 19 & 13 & 0 \\\hline\end{array}$ Narrend
-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 limited resource base

Correct Answer:

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