Moving along a PPF, marginal cost is
A) the cost of producing the first unit of a good or service.
B) the total cost, less the production of the other good or service.
C) greater than the opportunity cost.
D) equal to the opportunity cost of producing one more unit of a good or service.

Question

Quizplus · Accepted Answer

Moving along a Production Possibility Frontier (PPF), the marginal cost of producing an additional unit of a good or service is represented by the opportunity cost of producing that unit. This is because, in order to produce one more unit of a good, resources must be reallocated from the production of another good, leading to a trade-off that is captured by the opportunity cost.

Moving Along a PPF, Marginal Cost Is