Figure 2.4 Production Possibilities Frontier

-In Figure 2.4 the marginal rate of transformation of autos into wheat is
A) one and two-thirds
B) two and one-third
C) three fifths
D) three sevenths

Question

Figure 2.4 Production Possibilities Frontier
 
-In Figure 2.4 the marginal rate of transformation of autos into wheat is
A) one and two-thirds 
B) two and one-third 
C) three fifths 
D) three sevenths

Quizplus · Accepted Answer

The marginal rate of transformation (MRT) is the slope of the production possibility frontier (PPF). If the PPF is linear, the MRT is constant and can be calculated as the ratio of the change in the quantity of one good to the change in the quantity of the other good. In this case, it is three fifths.