7. One difference between Production Possibilities Curves B and C in Figure 2 is that:

1. the opportunity cost of good 1 in terms of good 2 is constant on curve B, but is different at different points on curve C.
2. the opportunity cost of good 1 in terms of good 2 is constant on C, but is different at different points on B.
3. curve B implies that good 1 is always preferred to good 2.
4. if all resources are used to produce good 2, then B implies more can be produced than on C.
5. curve B implies more efficient production of both goods than C.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved