The above figure shows the production possibility frontier for a country. What is the opportunity cost per tonne of rice to move from point D to E?
A) 333 bottles of wine
B) 3,000 bottles of wine
C) 3 bottles of wine
D) 1/3 of a bottle of wine
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The opportunity cost of moving from point D to E is 333 bottles of wine. This is because at point D, the country is producing 6,000 tonnes of rice and 6,000 bottles of wine. At point E, the country is producing 6,333 tonnes of rice and 3,000 bottles of wine. Therefore, the country has to give up 333 bottles of wine in order to produce an additional 333 tonnes of rice.

The Above Figure Shows the Production Possibility Frontier for a Country