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

Question

Quizplus · Accepted Answer

The opportunity cost is calculated by the slope of the production possibility frontier. If Sam produces 200 kg of cabbages and 0 kg of potatoes or 0 kg of cabbages and 100 kg of potatoes, the opportunity cost of 1 kg of cabbage is 100/200 = 0.5 kg of potatoes.

If Farmer Sam MacDonald Can Produce 200 Kilograms of Cabbages