Figure 3-4

-Refer to Figure 3-4.The opportunity cost of 1 novel for Jordan is
A) 1/3 poem.
B) 3 poems.
C) 4 poems.
D) 12 poems.

Question

Figure 3-4
 
-Refer to Figure 3-4.The opportunity cost of 1 novel for Jordan is
A) 1/3 poem. 
B) 3 poems. 
C) 4 poems. 
D) 12 poems.

Quizplus · Accepted Answer

The opportunity cost for Jordan is the next best alternative forgone, which in this case is the slope of the PPF between novels and poems. From the graph, we can see that the slope of the PPF is 1 novel/ 3 poems. Therefore, to obtain 1 novel, Jordan must give up 3 poems, making the opportunity cost 3 poems. Therefore, the best choice for Jordan would be to produce 2 novels, obtaining an opportunity cost of 6 poems.

Figure 3-4 -Refer to Figure 3-4.The Opportunity Cost of 1 Novel for of 1