Chapter 1R, Problem 10MCQ

To determine

The question requires us to identify the true option about the opportunity cost of producing potatoes.

Explanation of Solution

The following graph represents the PPC for potatoes and fish in the Atlantis economy:

  

Atlantis has to decrease the production of fish to increase the production of potatoes. The above graph represents that with each increasing production of potatoes, the foregone quantity of fish rises continuously. The following table represents the opportunity costs of producing more potatoes:

Quantity of potatoes	Opportunity cost of producing more potatoes in terms of fish.
0	-
200	25
400	50
600	100
800	200
1000	300

So, opportunity cost of producing more potatoes is rising continually.

Option “b” is correct.

Economics Concept Introduction

The production possibility curve (PPC) represents the all possible combination of two goods that can be produced by using the given resources in an economy.