When operating on its PPF, a country can produce 2 tons of butter and 200 cars OR 3 tons of butter and 150 cars. The opportunity cost of 1 ton of butter is _ _ cars per ton of butter.
A) 200
B) 50
C) 0.75
D) 300

Question

Quizplus · Accepted Answer

The opportunity cost of producing an additional ton of butter is the number of cars that must be given up. Moving from 2 tons of butter and 200 cars to 3 tons of butter and 150 cars, the country gives up 50 cars to produce 1 more ton of butter.

When Operating on Its PPF, a Country Can Produce 2