(Figure: Bicycles and Radishes I) Use Figure: Bicycles and Radishes I.The figure shows production possibility frontiers for two countries that produce only radishes and bicycles.The axes of the two graphs are measured in equivalent units.Country A is operating at point M,and country B is operating at point N.Suppose country A discovers a new technology that greatly increases its ability to produce bicycles but has no effect on its ability to produce radishes.This would:

A) lower the opportunity cost of producing radishes in country A.
B) increase the opportunity cost of producing radishes in country A.
C) not affect the opportunity cost of producing radishes in country A.
D) increase the opportunity cost of producing radishes in country B.

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paras chhoda · Accepted Answer

Final Answer : B, Explanation :  If country A discovers a new technology that increases its ability to produce bicycles, it will shift its production possibility frontier for bicycles to the right. As a result, country A will be able to produce more bicycles with the same amount of resources, which will increase the opportunity cost of producing radishes. Therefore, B is the correct answer. Option A is incorrect because, with the increased ability to produce bicycles, the opportunity cost of producing radishes will rise. Option C is incorrect because the discovery of a new technology for bicycles will affect the production possibility frontier for radishes. Option D is incorrect because the discovery of a new technology only affects country A's ability to produce bicycles, not country B's production possibility frontier.

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