Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.)

-Refer to Figure 3-5.For Country A,what is the opportunity cost of each additional car that it decides to produce?
A)25 bushels of corn
B)30 bushels of corn
C)35 bushels of corn
D)40 bushels of corn

Question

Figure 3-5 The graph below represents the various combinations of cars and corn that Country A could produce in a given month. (On the vertical axis, corn is measured in bushels.)
 
-Refer to Figure 3-5.For Country A,what is the opportunity cost of each additional car that it decides to produce?
A)25 bushels of corn 
B)30 bushels of corn 
C)35 bushels of corn 
D)40 bushels of corn

Quizplus · Accepted Answer

The opportunity cost of each additional car produced can be found by calculating the slope of the production possibilities curve. The slope is the change in corn production divided by the change in car production. Moving from point A to point B (producing an additional car), the corn production decreases from 200 bushels to 170 bushels, which is a decrease of 30 bushels. Therefore, the opportunity cost of producing one more car is 30 bushels of corn. Option B is the correct answer.

Figure 3-5 the Graph Below Represents the Various Combinations of Cars