In Figure 1.5, at which of the following points would the opportunity cost of producing another doughnut be greatest?
A)A.
B)B.
C)C.
D)D.

Question

In Figure 1.5, at which of the following points would the opportunity cost of producing another doughnut be greatest?
A)A. 
B)B. 
C)C. 
D)D.

Quizplus · Accepted Answer

At point C, the slope of the production possibilities curve (PPC) is steepest. This means that in order to produce one more doughnut, a relatively large amount of coffee must be given up. Therefore, the opportunity cost of producing another doughnut is greatest at point C.