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08 PRESENTATION
THE PRODUCTION ALTERNATIVES CHART
SMART TABLE
Opportunity cost 3 3 9 6
of cars 2000 1000 2000 1000
Opportunity cost
2000 1000 2000 1000
of guided
missiles 3 3 9 6
THE ECONOMY AT POINT C
CONCLUSION
A B C D
9
B C D E The opportunity cost of producing cars:
2000
Opportuni 3 3 9 6
The cost of one-million more cars:
ty cost of 9
cars 2000 1000 2000 1000 106 x = 4500 guided missiles.
2000
Opportuni 1000
ty cost of 2000 1000 2000 1000 The opportunity cost of guided missiles :
L 3
guided 3 3 9 6
missiles The cost of one-million more GM:
1000
103 x 333 333 guided missiles.
3
+) Point H is an infeasible point.
+) Economy growth-though improved
C&D
technology, increase in inputs, and/or
better inputs must be archived to attain H.
FEATURES
Q 20 tons of wheat and
10 000 set of cloths
CONCLUSION
# This economy can’t
because the point
outside the PPF curve.
OPPORTUNIY COST
A B C D
Opportuni
-ty cost of 4 3 1 1
producing 5 5 3 9
wheat
Opportuni
-ty cost of 5 5 3 9
producing 4 3 1 1
cloths