How are the slope of a production possibilities frontier and the opportunity cost of the goods related?
A)The slope is a graphical representation of the cost of expanding production of both goods.
B)The slope is a graphical measure of the growth rate of the economy.
C)The slope is a graphical representation of the cost of decreasing unemployment.
D)The slope is a graphical representation of the rate of trade-off between the goods.
E)The slope is a graphical representation of the cost of economic growth in the economy.

Question

Quizplus · Accepted Answer

The slope of the production possibilities frontier represents the rate of trade-off between the production of two goods. As one good is produced more of, the production of the other good must be decreased. This represents the opportunity cost of producing more of one good in terms of the other good. Therefore, D is the best choice as it correctly describes the relationship between the slope and opportunity cost.

How Are the Slope of a Production Possibilities Frontier and the Opportunity