Exhibit 2-10 Production possibilities curve data
A
B
C
D
E
Capital goods 0
1
2
3
4
Consumption goods25
23
19
13
0
Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10. As additional units of capital goods are being produced, the number of consumption goods produced must:
A. increase because the production possibility table shows only the maximum efficiency points.
B. increase because of the law of increasing costs.
C. decrease because of the law of increasing costs.
D. decrease because of the finite nature of the resource base.
Answer: D
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