The figure below shows Arcticland's annual production possibilities boundary for the production of fish and ice. FIGURE 32-4 Refer to Figure 32-4.What is Arcticland's opportunity cost of fish in terms of ice?

Question

The figure below shows Arcticland's annual production possibilities boundary for the production of fish and ice.  FIGURE 32-4 Refer to Figure 32-4.What is Arcticland's opportunity cost of fish in terms of ice?

Quizplus · Accepted Answer

Arcticland's opportunity cost of fish in terms of ice is equal to the slope of the production possibilities boundary, which is -2 (the change in ice divided by the change in fish). Therefore, the opportunity cost of one unit of fish is two units of ice. Choice C is the only option where the opportunity cost of fish in terms of ice is 2.

The Figure Below Shows Arcticland's Annual Production Possibilities Boundary for the Production