The following table shows the various combinations of two commodities, Gun and Bread that an economy can produce with a given amount of resources. These combinations lie on the same PPF
Combinations Gun Bread in 100 tons
A 0 20
B 1 18
C 2 15
D 3 11
E 4 6
F 5 0
Opportunity cost of increasing production of Gun to 5 units in combination F is ______ tons of bread

200

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100

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600

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500

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Solution

The correct option is A 600
in reference to combination F : in order to produce the 5th gun 600 tons of bread is to be sacrificed ,therefore opportunity cost to produce the 5th gun is 600 tons of bread.(opportunity cost refers to the next best alternative use)

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Similar questions

Cloth (Thousand bales)	$0$	$1$	$2$	$3$	$4$
Wheat (Lakh tonnes)	$100$	$90$	$70$	$40$	$0$

Watches (Millions)	$0$	$1$	$2$	$3$	$4$	$5$
Shoes (Thousands)	$90, 000$	$80, 000$	$68, 000$	$52, 000$	$34, 000$	$10, 000$

Guns(Units)	0	1	2	3	4	5
Bread (Units)	30	28	24	18	10	0

Name the situation reflected by an economy which produces a combination of goods that lie below its production possibility curve.

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