Figure 2.2
-Figure 2.2 presents a production possibilities curve for a given year for a country that can either produce highways or provide people with medical care.The opportunity cost of the fourth new highway built in a year is
A) less than the opportunity cost of the third new highway.
B) the same as the opportunity cost of the third new highway.
C) greater than the opportunity cost of the third new highway.
D) the sum of the opportunity costs of the first three highways built.

Question

Figure 2.2
-Figure 2.2 presents a production possibilities curve for a given year for a country that can either produce highways or provide people with medical care.The opportunity cost of the fourth new highway built in a year is
A) less than the opportunity cost of the third new highway. 
B) the same as the opportunity cost of the third new highway. 
C) greater than the opportunity cost of the third new highway. 
D) the sum of the opportunity costs of the first three highways built.

Quizplus · Accepted Answer

As we move along the production possibilities curve, the opportunity cost of producing another highway increases. This is because resources are not perfectly adaptable to producing both highways and medical care. Therefore, producing the fourth highway requires giving up a relatively larger amount of medical care compared to the opportunity cost of producing the third highway. Hence, the answer is C: greater than the opportunity cost of the third new highway.

Figure 2.2 -Figure 2.2 Presents a Production Possibilities Curve for a Given