Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two
-Refer to Figure 2-14.The opportunity cost of moving from point U to point R is
A)60 bushels of apples.
B)80 bushels of apples.
C)80 sweaters.
D)160 sweaters.

Question

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters,apples (in bushels),or a combination of the two
-Refer to Figure 2-14.The opportunity cost of moving from point U to point R is
A)60 bushels of apples. 
B)80 bushels of apples. 
C)80 sweaters. 
D)160 sweaters.

Quizplus · Accepted Answer

The opportunity cost of moving from point U to point R is 60 bushels of apples. This is because at point U, the economy is producing 100 bushels of apples and 20 sweaters. At point R, the economy is producing 40 bushels of apples and 100 sweaters. Therefore, the economy must give up 60 bushels of apples in order to produce 80 more sweaters.

Figure 2-14 Consider the Production Possibilities Curve for a Country