The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the Ricardian model is equal to ________ and it ________ as more cloth is produced.

Question

Quizplus · Accepted Answer

The slope of the production possibility frontier is equal to -MPLF/MPLC, which is the negative of the ratio of the marginal product of labor in food production to the marginal product of labor in cloth production. As more cloth is produced, the marginal product of labor in cloth production will decrease, while the marginal product of labor in food production will remain constant. This will cause the slope of the production possibility frontier to become steeper.

The Slope of a Country's Production Possibility Frontier with Cloth