The slope of the production possibilities frontier at a point indicates ________.
A) the preferences of a country
B) a country's total gains from trade
C) a country's opportunity cost of production
D) a country's trade balance

Question

Quizplus · Accepted Answer

The slope of the production possibilities frontier at a point indicates a country's opportunity cost of production. This is because the slope represents the amount of one good that must be given up in order to produce more of the other good. This opportunity cost is important in determining which goods a country should specialize in producing and trading, based on their comparative advantage.

The Slope of the Production Possibilities Frontier at a Point