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 Pada 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 Pada the cost of producing one more unit of wheat is equal to:

Quizplus · Accepted Answer

The slope of the production possibilities curves represents the opportunity cost of producing one more unit of a good in terms of the other good. In Pada, the slope of the curve is -3, meaning that in order to produce one more unit of wheat, 3 units of corn must be given up. Therefore, the opportunity cost of producing one more unit of wheat is 1/3 unit of corn.

Exhibit 21-1 Production Possibilities Curves