Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country B is:
A.12 cars.
B.4 trucks.
C.1.5 cars
D.3 cars.
A)measures the opportunity cost of trucks in terms of cars.
B)measures the trade-off that Country A face when deciding how to allocate resources.
C)is constant because the opportunity cost remains constant.
D)All of these statements are true.

Question

Refer to the figure shown,which represents the production possibilities frontiers for Countries A and B.Which of the following statements is true? The opportunity cost of a truck in Country B is:
A.12 cars.
B.4 trucks.
C.1.5 cars
D.3 cars.
A)measures the opportunity cost of trucks in terms of cars. 
B)measures the trade-off that Country A face when deciding how to allocate resources. 
C)is constant because the opportunity cost remains constant. 
D)All of these statements are true.

Quizplus · Accepted Answer

The figure represents the production possibility frontiers for Countries A and B, where the opportunity cost of producing one good in terms of the other is shown by the slope of the frontier. Therefore, statement A is correct. The production possibility frontier measures the trade-off that a country faces when deciding how to allocate its resources, so statement B is also correct. The slope of the frontier represents the opportunity cost, which is constant only when the resources are perfectly adaptable between the production of two goods, so statement C is also correct. Therefore, all of these statements are true, and the best choice is D.

Refer to the Figure Shown,which Represents the Production Possibilities Frontiers