Refer to FIGURE 1.FIGURE 1FoodLE80604020I20I 140 60 80 100 110 120 140 160 180 200 ClothingIf the economy were operating at point F (inside the PPC)the opportunity cost of producing 20 additional units of food would be 30 units of clothing.O the opportunity cost of acquiring 30 additional units of clothing would be 20 units of food.additional food could be produced at no opportunity cost in terms of sacrificed clothing.the opportunity cost of acquiring 20 additional units of food would be 40 units of clothing.O additional clothing cannot be produced unless there is a technological advance or new resources arediscovered.

Ans. The Production Possibility Frontier(PPF) shows all the possible combinations of two goods when…

Refer to FIGURE 1. FIGURE 1 Food 80 60 40 20 E B L L 20 40 60 80 100 110 120 140 160 180 200 Clothing If the economy were operating at point F (inside the PPC) O the opportunity cost of producing 20 additional units of food would be 30 units of clothing. O the opportunity cost of acquiring 30 additional units of clothing would be 20 units of food. O additional food could be produced at no opportunity cost in terms of sacrificed clothing. O the opportunity cost of acquiring 20 additional units of food would be 40 units of clothing. O additional clothing cannot be produced unless there is a technological advance or new resources are discovered.

Refer to FIGURE 1. FIGURE 1 Food 80 60 40 20 E B L L 20 40 60 80 100 110 120 140 160 180 200 Clothing If the economy were operating at point F (inside the PPC) O the opportunity cost of producing 20 additional units of food would be 30 units of clothing. O the opportunity cost of acquiring 30 additional units of clothing would be 20 units of food. O additional food could be produced at no opportunity cost in terms of sacrificed clothing. O the opportunity cost of acquiring 20 additional units of food would be 40 units of clothing. O additional clothing cannot be produced unless there is a technological advance or new resources are discovered.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 4PA

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