Question

ervlet/quiz?ctxajmpotter-00818quiz action-takeQuiz&iquiz probGuid RCPLCOA80101 Attempts: Score: /1 3. Chapter se2em07r, Section.03, Problem 132 Exhibit 3-13 40 24 20 12 production possibilities Curve E 0 45 10 Cakes Refer to Exhibit 3-13. A movement from Point D to Point C Oa. reallocates inputs without affecting overall levels of production. Ob. requires the sacrifice of four cupcakes in order to obtain one cake. Oc requires the sacrifice of one cake in order to obtain four cupcakes. Od. increases unemployment. Type here to search Lenovo Cupcakes

Answer 1

The answer to the question is option c. requires the sacrifice of one cake in order to obtain four cupcakes.

Reason is :-

To move from one point to another on a production possibility frontier , as there are limited resources , quantity of one goods production needs to be given up in order to get some more quantity of other good. This is because some of the available limited resources needs to be transferred in production of other good.

As can be seen above in the diagram , a movement from point D to point C , to get more cupcakes some cakes needs to be sacrificed. So in this , to get 4 more cupcakes 1 cake needs to be sacrificed.