A production possibilities curve has "good X" on the horizontal axis and "good Y" on the vertical axis. On this diagram, the opportunity cost of good X, in terms of good Y, is represented by the:

Question

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The opportunity cost of good X, in terms of good Y, is represented by the slope of the production possibilities curve, which is the change in Y (good Y) for each change in X (good X) along the curve. This slope indicates how much of good Y must be given up to produce more of good X.

A Production Possibilities Curve Has "Good X" on the Horizontal