Consider two points on a PPF: point A,at which there are 500 oranges and 100 apricots,and point B,at which there are 501 oranges and 95 apricots.If the economy is currently at point B,the opportunity cost of moving to point A is
A) 5 apricots.
B) 1 orange.
C) 95 apricots.
D) 500 oranges.

Question

Quizplus · Accepted Answer

The opportunity cost of moving from point B to point A is the amount of apricots that would need to be given up to gain one more orange. In this case, the economy would have to give up 5 apricots to gain one more orange, so the answer is B) 1 orange. Therefore, it would be the best choice to move to point A as it only has a small opportunity cost.

Consider Two Points on a PPF: Point A,at Which There