The slope of the production possibilities frontier curve measures
A)opportunity cost of producing the good measured on the x-axis.
B)comparative advantage.
C)absolute advantage.
D)marginal benefit from the good measured on the y-axis.
E)preferences for the goods measured on both axes.

Question

Quizplus · Accepted Answer

The slope of the production possibilities frontier curve measures the opportunity cost of producing the good measured on the x-axis. Opportunity cost is the value of the next best alternative that must be given up in order to pursue a certain action. Therefore, the slope of the PPF curve indicates how much of a good has to be given up in order to produce an additional unit of another good.

The Slope of the Production Possibilities Frontier Curve Measures