Assume for Brazil that the opportunity cost of each cashew is 100 peanuts.Which of these pairs of points could be on Brazil's production possibilities frontier?
A)(200 cashews,30,000 peanuts)and (150 cashews,35,000 peanuts)
B)(200 cashews,40,000 peanuts)and (150 cashews,30,000 peanuts)
C)(300 cashews,60,000 peanut)and (200 cashews,50,000 peanuts)
D)(300 cashews,60,000 peanuts)and (200 cashews,80,000 peanuts)

Question

Quizplus · Accepted Answer

For every 1 cashew produced, Brazil gives up the opportunity to produce 100 peanuts. 
Therefore, the production possibilities frontier will have a negative slope of -100. 
Choice A has a slope of (-30,000+35,000)/(200-150) = 100, which is the opportunity cost of producing cashews. 
Choice B has a slope of (-30,000+40,000)/(200-150) = 200, which means for every 1 cashew produced, Brazil gives up the opportunity to produce 200 peanuts, which is not in line with the given opportunity cost. 
Choice C has a slope of (-50,000+60,000)/(200-300) = 100, which is the opportunity cost of producing cashews. 
Choice D has a slope of (-60,000+80,000)/(200-300) = 200, which again, is not in line with the given opportunity cost. 
Therefore, choice A is the only possible combination that fits the given opportunity cost of cashews and peanuts.

Assume for Brazil That the Opportunity Cost of Each Cashew