On a graph of a production possibilities frontier, opportunity cost is represented by
A)the slope of the production possibilities frontier.
B)the x- axis intercept.
C)a point on the horizontal axis.
D)a ray through the origin.
E)a point on the vertical axis.

Question

Quizplus · Accepted Answer

The slope of the production possibilities frontier represents the opportunity cost because it shows the tradeoff between producing one good and producing another. As we move along the curve, we have to give up more and more of one good to produce additional units of the other good. This reflects the increasing opportunity cost of producing more of one good.

On a Graph of a Production Possibilities Frontier, Opportunity Cost