Refer to the accompanying figure. The opportunity cost of producing one bushel of corn is:
A)2 bushels of wheat.
B)½ of a bushel of wheat.
C)500 bushels of wheat.
D)250 bushels of wheat.

Question

Refer to the accompanying figure. The opportunity cost of producing one bushel of corn is: 
A)2 bushels of wheat. 
B)½ of a bushel of wheat. 
C)500 bushels of wheat. 
D)250 bushels of wheat.

Quizplus · Accepted Answer

This farmer can grow twice as much wheat as corn in a year. So, each bushel of corn grown means giving up two bushels of wheat. More generally, the opportunity cost of producing an additional unit of the good on the horizontal axis is the absolute value of the slope of the PPC.

Refer to the Accompanying Figure