Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month.

-Refer to Figure 3-11.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by
A) 0.75 pound.
B) 0.80 pound.
C) 1.00 pounds.
D) 1.25 pounds.

Question

Figure 3-11
The graph below represents the various combinations of ham and cheese (in pounds) that the nation of Bonovia could produce in a given month.
 
-Refer to Figure 3-11.Whenever Bonovia increases its production of ham by 1 pound per month,then it must decrease its production of cheese by
A) 0.75 pound. 
B) 0.80 pound. 
C) 1.00 pounds. 
D) 1.25 pounds.

Quizplus · Accepted Answer

By examining the slope of the production possibilities curve, we can see that the opportunity cost of producing an additional pound of ham is the loss of 0.8 pounds of cheese. This means that if Bonovia wants to produce 2 additional pounds of ham, they will have to give up 1.6 pounds of cheese (2 x 0.8 = 1.6). Therefore, the correct answer is option B, which represents the opportunity cost of producing an additional pound of ham.

Figure 3-11 the Graph Below Represents the Various Combinations of Ham and Ham