When operating on its PPF, a country can produce 2 tons of butter and 200 cars OR 3 tons of butter and 150 cars. The opportunity cost of 1 ton of butter is ________cars per ton of butter.
A) 300
B) 200
C) 0.75
D) 50

Question

Quizplus · Accepted Answer

The opportunity cost of increasing butter production from 2 tons to 3 tons is the decrease in car production from 200 to 150 cars, which is 50 cars. Therefore, the opportunity cost of 1 ton of butter is 50 cars.

When Operating on Its PPF, a Country Can Produce 2