Question

Given the graph above which of the following is true?

a. combination A results an inefficient use of resources

b. This business doesn’t have enough resources to produce 60 bikes and 100 skateboards

c. The opportunity cost of each skateboard is constant

d. this business should produce more bikes

Answer 1

Option B is true

Step-by-step explanation:

There is an inefficient use of resources as depicted and hence there is a wide gap in supply and demand. Hence point B is correct

Point A depicts that due to higher demand of consumer good, there is a need to enhance the efficiency to meet the market demand. Thus option A is in correct partially

The opportunity cost of point C is higher than point B thus option C is incorrect.