Question

The table below represents points on an economy's current production possibilities curve.

A table with two columns, good X on the left and good Y on the right, is shown. The first row reads 1000 and 0. The second row reads 990 and 100. The third row reads 980 and 200. The fourth row reads 970 and 300.

The opportunity cost of increasing the production of good Y from 0 to 200 is


1,000 units of X


a

980 units of X


b

200 units of X


c

20 units of X


d

5 units of X


e

Answer 1

Opportunity cost = 1000 − 980 = 20 units of X. Answer: 20 units of X (c).