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 ________ people provided with medical care.

Question

Quizplus · Accepted Answer

To find the opportunity cost of the fourth new highway, we look at the slope of the production possibilities curve. The slope becomes steeper as we move down the curve because the opportunity cost of producing highways increases as we produce more of them. From the graph, we can see that producing the fourth new highway requires a sacrifice of 70,000 people provided with medical care (moving from point A to point B). Therefore, the best choice would be to produce three highways and allocate resources to providing medical care for a greater number of people.

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