Figure 3-7
-What is the opportunity cost of moving from point B to point A in Figure 3-7?
A)20 units of X
B)50 units of X
C)25 units of X
D)75 units of X

Question

Figure 3-7 
-What is the opportunity cost of moving from point B to point A in Figure 3-7?
A)20 units of X 
B)50 units of X 
C)25 units of X 
D)75 units of X

Quizplus · Accepted Answer

The opportunity cost of moving from point B to point A is the amount of X that must be given up to gain more of Y. In this scenario, moving from B to A results in a loss of 50 units of X, assuming a linear trade-off between X and Y on the production possibility frontier depicted in Figure 3-7.

Figure 3-7 -What Is the Opportunity Cost of Moving from Point B