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

Question

Quizplus · Accepted Answer

The slope of a country's production possibility frontier (PPF) in the specific factors model, with cloth on the horizontal axis and food on the vertical axis, is equal to the negative of the marginal product of labor in cloth (MPLC) divided by the marginal product of labor in food (MPLF), which is -MPLF/MPLC. This slope becomes steeper as more cloth is produced because the marginal product of labor in cloth decreases as more labor is allocated to cloth production, assuming diminishing returns.

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