PRODUCTION POSSIBLITY CURVE #1 Activity Figure 1 12 0 A B 10 8 GOOD B 6/ H D F 2 F G GOOD A Use Figure 1 and the following information to answer questions 1 through 4. If the economy represented by Figure 1 is presently producing 12 units of Good B and zero units of Good A then: 1. The opportunity cost of increasing production of Good A from zero units to one unit is the loss of unit(s) of Good B. 2. The opportunity cost of increasing production of Good A from one unit to two units is the loss of unit(s) of Good B. 3. The opportunity cost of increasing production of Good A from two units to three units is the loss of unit(s) of Good B. 4. This is an example of (constant/increasing) opportunity cost per unit for Good A. (Key: Look at how much of Good B you give up each time to get 1 more of Good A.) Use Figure 1 and the following information to answer questions 5 and 8. 5. If you are producing 6 of Good B and 1 of Good A, you are 6. Given the current resources and technology, can you produce 8 of Good B and 6 of Good A? 7. What is the above situation (question 6) referred to as? 8. What would you have to do in order to be able to produce at 8 of Good B and 6 of Good A? Figure 2 12 A 10 B GOOD B 6 N D GOOD A Use Figure 2 and the following information to answer questions 9 through 12. If the economy represented in Figure 2.2 is presently producing 12 units of Good B and zero units of Good A then: 9. The opportunity cost of increasing production of Good A from zero units to one unit is the loss of unit(s) of Good B. 10. The opportunity cost of increasing production of Good A from one unit to two units is the loss of unit(s) of Good B 11. The opportunity cost of increasing production of Good A from two units to three units is the loss of unit(s) of Good B. 12. This is an example of (constant/increasing) opportunity cost per unit for Good A. (Key: Look at how much of Good B you give up each time to get 1 more of Good A.)