Exhibit 21-1 Production possibilities curves

-In Exhibit 21-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.In Nabia the cost of producing one more unit of wheat is equal to:

Question

Exhibit 21-1 Production possibilities curves
 
-In Exhibit 21-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.In Nabia the cost of producing one more unit of wheat is equal to:

Quizplus · Accepted Answer

The slope of the production possibilities curve represents the opportunity cost of producing one good in terms of the other. The slope of the wheat production possibilities curve in Nabia is -4, which means that producing one more unit of wheat requires giving up 4 units of corn. Therefore, the cost of producing one more unit of wheat is 1/4 unit of corn.

Exhibit 21-1 Production Possibilities Curves