Consider two points on the PPF: point A,at which there are 10 apples and 20 pears,and point B,at which there are 7 apples and 21 pears.If the economy is currently at point A,the opportunity cost of moving to point B is
A)1 pear.
B)7 apples.
C)3 apples.
D)21 pears.

Question

Quizplus · Accepted Answer

The opportunity cost of moving from point A to point B is the number of units of one good that must be given up to produce an additional unit of the other good. At point A, there are 10 apples and 20 pears, while at point B, there are 7 apples and 21 pears. Therefore, to produce one additional pear, we must give up 3 apples (10-7=3). Therefore, the opportunity cost of moving from A to B is 3 apples.

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