Exhibit 15-1 Production possibilities curves
-In Exhibit 15-1, the production possibilities curves of wheat and corn for Nabia and Pada are presented. In Nabia the cost of producing one more unit of wheat is equal to:

Question

Exhibit 15-1 Production possibilities curves 
-In Exhibit 15-1, the production possibilities curves of wheat and corn for Nabia and Pada are presented. In Nabia the cost of producing one more unit of wheat is equal to:

Quizplus · Accepted Answer

The slope of the production possibilities curve gives the opportunity cost of producing one more unit of a good in terms of the other good. In the case of Nabia, the slope of the curve is -4, meaning that in order to produce one more unit of wheat, Nabia must give up 4 units of corn. Therefore, the cost of producing one more unit of wheat is 1/4 unit of corn.

Exhibit 15-1 Production Possibilities Curves