If a country produces good Y (measured on the vertical axis)and good X (measured on the horizontal axis),then the absolute value of the slope of its production possibility frontier is equal to
A)the price of good X divided by the price of good Y.
B)the price of good Y divided by the price of good X.
C)the cost of capital (assuming that good Y is capital intensive)divided by the cost of labor.
D)the opportunity cost of good Y.
E)the opportunity cost of good X.

Question

Quizplus · Accepted Answer

The absolute value of the slope of the production possibility frontier (PPF) represents the opportunity cost of producing one more unit of good X in terms of good Y.

If a Country Produces Good Y (Measured on the Vertical