The quantity of shoes produced is measured along the horizontal axis of a PPF and the quantity of shirts is measured along the vertical axis. As you move down toward the right along the PPF, the marginal cost of
A) shoes and shirts is equal at the midpoint between the vertical and horizontal axis.
B) shoes decreases.
C) shirts increases.
D) shoes increases.

Question

Quizplus · Accepted Answer

As you move down toward the right along the PPF, the opportunity cost of producing shoes (in terms of shirts foregone) increases, which means the marginal cost of shoes increases. Therefore, the correct answer is D.

The Quantity of Shoes Produced Is Measured Along the Horizontal