Figure 3-21
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier
-Refer to Figure 3-21.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?
A)1/4 bolt
B)4 bolts
C)5 bolts
D)80 bolts

Question

Figure 3-21
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier  
-Refer to Figure 3-21.Suppose Azerbaijan decides to increase its production of nails by 20.What is the opportunity cost of this decision?
A)1/4 bolt 
B)4 bolts 
C)5 bolts 
D)80 bolts

Quizplus · Accepted Answer

From Azerbaijan's production possibilities frontier, we can see that the opportunity cost of producing 20 more nails is giving up the production of 5 bolts (moving from point A to point B on the graph). Therefore, the correct answer is C, 5 bolts.

Figure 3-21 Uzbekistan's Production Possibilities Frontier