Question

Assuming there are only two types of outputs in a country: consumer goods and nuclear missiles. All else being constant, as the nation produces more missiles,

A. the more likely it is to satisfy all consumer wants.

B. the opportunity cost of consumer wants being satisfied will diminish.

C. every additional missile will reduce consumer goods production more and more.

Answer 1

Option A is false because Production of more missile can't satisfy consumer wants.

Option B is also false because, the opportunity cost of consumer wants is nothing but production of nuclear missile. But the production is actually increasing.

Option C is correct because as the production of nuclear missile increases it will reduce the production of consumer goods. Because every other things remains constant so factor of production is constant. Hence increase in production of one commodity will decrease the production of the other one.

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