The slope of the production possibilities frontier curve measures
A)absolute advantage.
B)preferences for the goods measured on both axes.
C)marginal benefit from the good measured on the y- axis.
D)opportunity cost of producing the good measured on the x- axis.
E)comparative advantage.

Question

Quizplus · Accepted Answer

The slope of the production possibilities frontier curve measures the opportunity cost of producing the good measured on the x-axis. Opportunity cost refers to the cost of forgoing the production of one good in order to produce more of the other. As we move along the curve from left to right, we produce more of the good on the x-axis and less of the good on the y-axis. The slope measures how much of the good on the y-axis must be given up in order to produce one more unit of the good on the x-axis. Therefore, the correct choice is D.

The Slope of the Production Possibilities Frontier Curve Measures