Figure 3-2
Peru's Production Possibilities Frontier

-Refer to Figure 3-2.Suppose Peru decides to increase its production of rubies by 30.What is the opportunity cost of this decision?

Question

Figure 3-2
Peru's Production Possibilities Frontier
 
-Refer to Figure 3-2.Suppose Peru decides to increase its production of rubies by 30.What is the opportunity cost of this decision?

Quizplus · Accepted Answer

The opportunity cost is the amount of emeralds that must be given up to produce more rubies. If the production possibility frontier shows that 30 rubies cost 1 emerald, then the opportunity cost of producing 30 more rubies is 1 emerald.

Figure 3-2 Peru's Production Possibilities Frontier