(Figure: Production Possibility Frontier for Tealand) Use Figure: Production Possibility Frontier for Tealand.Tealand is producing at point C on its production possibility frontier.What is the opportunity cost of increasing the production of tea from 20 million cups to 30 million cups?

A) 10 million cups of tea
B) 5 million scones
C) 10 million scones
D) The answer is impossible to determine from the information given.

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Jacob Gringorten · Accepted Answer

Final Answer : B, Explanation :  The opportunity cost of moving from 20 million cups of tea to 30 million cups (assuming point C is on the curve) is the amount of scones Tealand must give up to increase tea production. This is represented by the movement along the production possibility frontier (PPF) and is quantified by the decrease in scones produced, which is 5 million scones.

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