Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The production of good Y will decrease due to limited resources.
B
The production of good Y will increase as well.
C
There will be no effect on the production of good Y.
D
Good Y will become more valuable.
Understanding the Answer
Let's break down why this is correct
Answer
When a country decides to produce more of good X, it usually means that it has to give up some production of good Y. This is because resources, like labor and materials, are limited, and using more resources for good X means fewer resources are available for good Y. This situation is known as opportunity cost, which is the value of the next best alternative that is forgone. For example, if a country focuses on making more cars (good X), it might have to reduce the number of bicycles (good Y) it produces. Therefore, the decision to produce more of one good often leads to a decrease in the production of another good.
Detailed Explanation
When a country makes more of good X, it uses resources that could have made good Y. Other options are incorrect because Some might think that making more of good X helps good Y too; It's a common mistake to think nothing changes.
Key Concepts
Opportunity Cost
Production Possibilities Curve
Resource Allocation
Topic
Analyzing Opportunity Costs
Difficulty
easy level question
Cognitive Level
understand
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