The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the Ricardian model is equal to ________ and it ________ as more cloth is produced.

Question

Quizplus · Accepted Answer

In the Ricardian model, the slope of the production possibility frontier (PPF) is determined by the opportunity cost, which is the ratio of the marginal products of labor (MPL). It is given by -MPL_F/MPL_C and remains constant because the Ricardian model assumes constant returns to scale and no changes in technology or resources.

The Slope of a Country's Production Possibility Frontier with Cloth