-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B,then the opportunity cost of another million gallons of milk is
A) 4 gallons of ice cream for a gallon of milk.
B) 3 gallons of ice cream for a gallon of milk.
C) 1 gallon of ice cream for a gallon of milk.
D) 1/3 of a gallon of ice cream for a gallon of milk.
E) zero because after producing another million gallons of milk then zero gallons of ice cream are produced.

Question

-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B,then the opportunity cost of another million gallons of milk is
A) 4 gallons of ice cream for a gallon of milk. 
B) 3 gallons of ice cream for a gallon of milk. 
C) 1 gallon of ice cream for a gallon of milk. 
D) 1/3 of a gallon of ice cream for a gallon of milk. 
E) zero because after producing another million gallons of milk then zero gallons of ice cream are produced.

Quizplus · Accepted Answer

The opportunity cost is determined by the slope of the production possibilities frontier at point B. If moving from point B to produce more milk results in a decrease of 3 gallons of ice cream for each additional gallon of milk, then the opportunity cost is 3 gallons of ice cream per gallon of milk.

-The Figure Above Shows the Production Possibilities Frontier for a Country.If