Suppose an economy opts to produce and consume at combination 'C'. a) What is the opportunity cost for producing 6 more consumer goods? b) What is the opportunity cost for producing 4 more capital goods? c) new possibilities for capital goods (table)

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1 Answer
Sep 12, 2017

a) 8 capital goods
b) 6 consumer goods
c) No clue

Explanation:

Your table seems to allow the answers for a and b to be read off directly.

At combination 'c', you product 12 consumer goods. 6 additional consumer goods brings this number up to 18, which is exactly what you have at combination 'b'. At this point, you can only produce 16 capital goods. So your cost for producing an additional 6 consumber goods is 24 - 16 = 8 capital goods.

From combination 'c', an additional 4 capital goods would be 28, which is point 'd'. Your consumer goods go down to 6, so your cost for producing an additional 4 captial goods is 6 consumer goods.

No idea what c is about.