The diagram below shows an economy's production possibility frontier (PDF) for capital goods (KKK) and consumer goods (CCC).
If the economy reallocates resources to move from point A A\,A to point B B\,B along the current PPF, which of the following best describes the immediate opportunity cost and the long-term impact on the economy's productive potential?
Immediate opportunity cost: A reduction in the current output of consumer goods.
Long-term impact: An outward shift of the PPF (as shown by the dashed curve) due to increased investment in productive capacity.
Immediate opportunity cost: A reduction in the current output of capital goods.
Long-term impact: An outward shift of the PPF (as shown by the dashed curve) due to increased investment in productive capacity.
Immediate opportunity cost: A reduction in the current output of consumer goods.
Long-term impact: An inward shift of the PPF because consumer demand decreases, lowering economic output.
Immediate opportunity cost: There is no opportunity cost because the economy remains on its frontier.
Long-term impact: The PPF remains static because total resource limits have not changed.
