A-LevelEconomicsBasic economic ideas and resource allocation9708/12 · Oct/Nov 2010 · Q31 Mark
The diagram shows the production possibility curve of an economy. [Figure 3.1] Which statement explains the shape of this curve?
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AMore efficient workers are drawn away from the production of consumer goods.
BResources cannot be switched between producing capital and consumer goods.
CThe economy is more efficient at producing capital than consumer goods.
DThe opportunity cost of producing capital goods increases the more capital goods are made.
✓ Correct answer
D: The opportunity cost of producing capital goods increases the more capital goods are made.
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