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

In the Ricardian model, the slope of the production possibility frontier (PPF) is determined by the opportunity cost of producing one good over another, which is constant. This slope is given by the negative ratio of the marginal product of labor in food production (-MPLF) to the marginal product of labor in cloth production (MPLC), and it remains constant as more cloth is produced, reflecting constant opportunity costs.

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