Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country B is:
A) 12 cars.
B) 4 trucks.
C) 1.5 cars
D) 3 cars.

Question

Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The opportunity cost of a truck in Country B is:
A) 12 cars. 
B) 4 trucks. 
C) 1.5 cars 
D) 3 cars.

Quizplus · Accepted Answer

The opportunity cost of a truck in Country B can be found by looking at the slope of its production possibilities frontier (PPF), which is the ratio of the change in cars to the change in trucks. From point A (producing 0 trucks and 24 cars) to point B (producing 8 trucks and 12 cars), Country B gives up 12 cars to produce 8 trucks, so the opportunity cost of a truck is 1.5 cars (12/8 = 1.5). Therefore, the best choice is D, as it reflects the correct opportunity cost of producing a truck in Country B.

Refer to the Figure Shown, Which Represents the Production Possibilities