On a diagram of a production possibilities boundary, the concept of opportunity cost is illustrated by the
A)distance from the origin to the boundary.
B)unattainable points outside the boundary.
C)negative slope of the boundary.
D)area bounded by the two axes and the boundary.
E)boundary being concave to the origin.

Question

Quizplus · Accepted Answer

The negative slope of the production possibilities boundary illustrates opportunity cost. As you move along the boundary, producing more of one good requires sacrificing some amount of the other good. This represents the opportunity cost of producing that additional unit of the first good.

On a Diagram of a Production Possibilities Boundary, the Concept