If farmer Sam MacDonald can produce 200 pounds of cabbages and no potatoes or no cabbages and 100 pounds of potatoes and if he faces a linear production possibility frontier,the opportunity cost of producing an additional pound of potatoes is _____ pound(s)of cabbage.
A)0.5
B)2
C)100
D)200

Question

Quizplus · Accepted Answer

The slope of the production possibility frontier (PPF) represents the opportunity cost. The slope is calculated as the change in the quantity of one good divided by the change in the quantity of the other good.
In this case, the PPF is linear, which means that the opportunity cost is constant. The farmer can produce 200 pounds of cabbages or 100 pounds of potatoes. To produce an additional pound of potatoes, the farmer needs to give up some cabbages. The opportunity cost of producing one pound of potatoes is the quantity of cabbages that the farmer needs to give up. The slope of the PPF is the ratio of the quantity of cabbages given up to the quantity of potatoes gained. Therefore, the opportunity cost of producing an additional pound of potatoes is 2 pounds of cabbage (200/100=2).

If Farmer Sam MacDonald Can Produce 200 Pounds of Cabbages