Use the following to answer question(s):
Exhibit: Production Possibilities Curve for Firms A and B

-(Exhibit: Production Possibilities Curve for Firms A and B. In Firm B, the opportunity cost of producing 1 more unit of good Y is:
A) 1/2 unit of X.
B) 2 units of X.
C) 20 units of X.
D) not able to be determined.

Question

Use the following to answer question(s): 
Exhibit: Production Possibilities Curve for Firms A and B
 
-(Exhibit: Production Possibilities Curve for Firms A and B. In Firm B, the opportunity cost of producing 1 more unit of good Y is:
A) 1/2 unit of X. 
B) 2 units of X. 
C) 20 units of X. 
D) not able to be determined.

Quizplus · Accepted Answer

The opportunity cost of producing 1 more unit of good Y in Firm B is the slope of its production possibilities curve, which is 2 units of X.

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