Figure 2-2

Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables.
-Refer to Figure 2-2.What is the opportunity cost of one pound of meat?

Question

Figure 2-2
  
Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables.
-Refer to Figure 2-2.What is the opportunity cost of one pound of meat?

Quizplus · Accepted Answer

The opportunity cost of one pound of meat is the amount of vegetables that must be given up to produce one more pound of meat. Reading from the graph, the opportunity cost of one pound of meat is 11 pounds of vegetables (the slope of the PPF). Therefore, the best choice would be to produce at point B, where the country is producing 3 pounds of meat and 28 pounds of vegetables. This is the point of maximum efficiency on the PPF, where the country is producing the most of both goods given their resources.

Figure 2-2 Figure 2-2 Above Shows the Production Possibilities Frontier for Mendonca