Exhibit 2-1
Refer to Exhibit 2-1. The PPF illustrates
A)constant opportunity costs between guns and butter.
B)that guns are more important than butter.
C)increasing opportunity costs between guns and butter.
D)the opportunity cost of one unit of guns is four units of butter.

Question

Exhibit 2-1 
Refer to Exhibit 2-1. The PPF illustrates
A)constant opportunity costs between guns and butter. 
B)that guns are more important than butter. 
C)increasing opportunity costs between guns and butter. 
D)the opportunity cost of one unit of guns is four units of butter.

Quizplus · Accepted Answer

The PPF exhibits constant opportunity costs between guns and butter, since the slope is always the same. This means that the opportunity cost of producing one unit of guns is always the same as the opportunity cost of producing one unit of butter. Therefore, the best choice would be at the point on the curve that maximizes production while staying within the PPF, such as point C.

Exhibit 2-1 Refer to Exhibit 2-1. the PPF Illustrates