Opportunity cost is illustrated by a movement from one point to another on the production possibilities frontier.

Question

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Opportunity cost refers to the loss of potential gain from alternatives when one alternative is chosen. This concept can be illustrated by a movement from one point to another on the production possibilities frontier, as choosing to produce more of one good means producing less of another. Therefore, the opportunity cost of producing one good is the reduction in the production of the other good.

Opportunity Cost Is Illustrated by a Movement from One Point