While moving on the production possibilities frontier,if the opportunity cost of producing one good is 1/2,the opportunity cost of producing the other good (in the same range)is
A)1/4.
B)2.
C)4.
D)1/2.
E)An amount that cannot be calculated without more information.

Question

Quizplus · Accepted Answer

According to the concept of the production possibilities frontier, as we move along the curve and produce more of one good, we have to sacrifice some units of the other good. The slope of the curve represents the opportunity cost of producing one good in terms of the other. If the opportunity cost of producing one good is 1/2, then to produce an additional unit of that good, we have to sacrifice 1/2 units of the other good. Therefore, the opportunity cost of producing the other good is 2 units (the reciprocal of 1/2), which is the answer choice B.

While Moving on the Production Possibilities Frontier,if the Opportunity Cost