The marginal rate of transformation equals the absolute slope of a country's production possibilities frontier.

Question

Quizplus · Accepted Answer

This statement is true. The marginal rate of transformation (MRT) is the rate at which one good must be sacrificed in order to produce an additional unit of another good. This is illustrated by the slope of the production possibilities frontier (PPF), which shows the maximum amount of one good that can be produced for every level of production of another good. The absolute slope of the PPF is equal to the MRT at any given point on the frontier.

The Marginal Rate of Transformation Equals the Absolute Slope of a Country's