FIGURE 2-3

-Refer to Figure 2-3. Comparatively, at which point is the opportunity cost of one more unit of a consumption good greater?

Question

FIGURE 2-3
 
-Refer to Figure 2-3. Comparatively, at which point is the opportunity cost of one more unit of a consumption good greater?

Quizplus · Accepted Answer

The opportunity cost of producing one more unit of a consumption good is greater at Point E than at Point D because moving from D to E would require giving up more of another good (e.g., capital goods) compared to moving from one point to another closer to the origin on a typical production possibility frontier, indicating a higher opportunity cost.

FIGURE 2-3 -Refer to Figure 2-3. Comparatively, at Which Point Is the Which