If we assume only one factor (labor), we can demonstrate on the PPF the opportunity cost of producing less of one good and more of the other good by:
A) taking the sum of the marginal products of labor for the two goods.
B) taking the difference of the marginal products of labor for the two goods.
C) taking the ratio of the marginal products of labor for the two goods.
D) taking the average of the marginal products of labor for the two goods.

Question

Quizplus · Accepted Answer

The opportunity cost of producing less of one good and more of the other is represented by the ratio of the marginal products of labor for the two goods. This is because the marginal product of labor for one good represents the additional units of that good that can be produced with an additional unit of labor, while the marginal product of labor for the other good represents the units of the other good that must be given up to produce that additional unit of the first good. Therefore, the ratio of the two marginal products of labor represents the opportunity cost of producing each good.

If We Assume Only One Factor (Labor), We Can Demonstrate