The diagram below shows the production possibilities frontier (PPF) for a country that produces guns (G) and butter (B). Most people in the country prefer guns, so in the absence of international trade, point A represents the combination of G and B that maximizes welfare. The slope of the PPF at point A is equal to -2. What is the opportunity cost of 1 unit of guns before trade? What is the opportunity cost of 1 unit of butter?

Question

The diagram below shows the production possibilities frontier (PPF) for a country that produces guns (G) and butter (B). Most people in the country prefer guns, so in the absence of international trade, point A represents the combination of G and B that maximizes welfare. The slope of the PPF at point A is equal to -2.  What is the opportunity cost of 1 unit of guns before trade? What is the opportunity cost of 1 unit of butter?

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The Answer of The diagram below shows the production possibilities frontier (PPF) for a country that produces guns (G) and butter (B). Most people in the country prefer guns, so in the absence of international trade, point A represents the combination of G and B that maximizes welfare. The slope of the PPF at point A is equal to -2.  What is the opportunity cost of 1 unit of guns before trade? What is the opportunity cost of 1 unit of butter?

The Diagram Below Shows the Production Possibilities Frontier (PPF) for a Country