Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.

-Refer to Figure 1.13 to answer this question.What is the opportunity cost of one more tonne of butter as output changes from point b to a?
A)2 guns.
B)4 guns.
C)10 guns.
D)6 guns.

Question

Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.
 
-Refer to Figure 1.13 to answer this question.What is the opportunity cost of one more tonne of butter as output changes from point b to a?
A)2 guns. 
B)4 guns. 
C)10 guns. 
D)6 guns.

Quizplus · Accepted Answer

Moving from point b to a involves producing one less gun and one more tonne of butter. Therefore, the opportunity cost of one more tonne of butter is the number of guns that could have been produced instead, which is 4 guns (from producing 12 to producing 8 guns). Thus, the best choice is to produce at point a, where the opportunity cost of one more tonne of butter is lower.

Figure 113 Shows Mendork's Production Possibility Curve for the Only Two