Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier:
A) measures the opportunity cost of trucks in terms of cars.
B) measures the trade-off that Country A faces when deciding how to allocate resources.
C) is constant, because the opportunity cost remains constant.
D) All of these statements are true.

Question

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier:
A) measures the opportunity cost of trucks in terms of cars. 
B) measures the trade-off that Country A faces when deciding how to allocate resources. 
C) is constant, because the opportunity cost remains constant. 
D) All of these statements are true.

Quizplus · Accepted Answer

The slope of Country A's production possibilities frontier measures the opportunity cost of trucks in terms of cars and represents the trade-off that Country A faces when deciding how to allocate resources. Since the opportunity cost remains constant, the slope is also constant. Therefore, all of these statements are true.

Refer to the Figure Shown, Which Represents the Production Possibilities