For each pair of jeans Casina produces,it gives up the opportunity to make 50 pounds of chocolate truffle.Marina can produce one pair of jeans for every 100 pounds of chocolate truffle it produces.Suppose the data is converted into production possibilities frontiers (PPFs),with constant opportunity costs,for both countries.While the pounds of chocolate truffle produced is measured on the vertical axis,the pairs of jeans produced are measured along the horizontal axis.Identify the correct statement in this case.

Question

Quizplus · Accepted Answer

Since Casina gives up 50 pounds of chocolate truffle for each pair of jeans produced, its opportunity cost of producing one pair of jeans is 50 pounds of chocolate truffle. Therefore, the slope of its PPF is -50. Marina, on the other hand, can produce one pair of jeans for every 100 pounds of chocolate truffle it produces, meaning its opportunity cost of producing one pair of jeans is 100 pounds of chocolate truffle. Therefore, the slope of its PPF is -100/1 or -100. Since -100 is a larger number than -50, Marina's PPF is steeper than Casina's (i.e. has a greater absolute slope). Therefore, the correct answer is D.

For Each Pair of Jeans Casina Produces,it Gives Up the Opportunity