In a production possibilities frontier graph,the cost of producing more units of a good is measured by the
A) dollar value of the resources used to produce the good.
B) amount of the other good or service that must be forgone.
C) dollar value of the additional output.
D) area in the arc between the PPF and a straight line drawn between the starting point and the ending point.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

The cost of producing more units of a good is measured by the amount of the other good or service that must be forgone, as shown by the tradeoff between the two goods on the PPF. This is because resources are scarce, and using them to produce more of one good means giving up some production of another good.

In a Production Possibilities Frontier Graph,the Cost of Producing More