Use the figure below to answer the following questions.
Figure 2.1.2
-Refer to the production possibilities frontier in Figure 2.1.2.At point C, the opportunity cost of producing one more unit of X is
A)8 units of X.
B)20 units of X.
C)20 units of Y.
D)1 unit of X.
E)1 unit of Y.

Question

Use the figure below to answer the following questions.
  Figure 2.1.2
-Refer to the production possibilities frontier in Figure 2.1.2.At point C, the opportunity cost of producing one more unit of X is
A)8 units of X. 
B)20 units of X. 
C)20 units of Y. 
D)1 unit of X. 
E)1 unit of Y.

Quizplus · Accepted Answer

The opportunity cost of producing one more unit of X at point C is the amount of Y that must be given up to produce that additional unit of X. Since the production possibilities frontier shows the trade-off between producing X and Y, moving along the curve to produce one more X involves giving up some amount of Y, not X. Therefore, the correct answer involves units of Y, not units of X.

Use the Figure Below to Answer the Following Questions