(The following economy produces two products.) Production Possibilities Table
Refer to the above table.In moving from possibility C to D, the cost of a unit of steel in terms of a unit of wheat is:
A)10
B)20
C)25
D)30

Question

(The following economy produces two products.) Production Possibilities Table
 Refer to the above table.In moving from possibility C to D, the cost of a unit of steel in terms of a unit of wheat is:
A)10 
B)20 
C)25 
D)30

Quizplus · Accepted Answer

Moving from point C to D, the economy must give up 20 units of wheat to produce 1 more unit of steel. Therefore, the opportunity cost of steel in terms of wheat is 20/1 = 20.

(The Following Economy Produces Two Products