The slope of the PPF is equal to the:
A)marginal rate of technical substitution.
B)marginal rate of substitution.
C)marginal rate of transformation.
D)marginal propensity to consume.

Question

Quizplus · Accepted Answer

The slope of the PPF (Production Possibility Frontier) is known as the marginal rate of transformation (MRT), which represents the amount of one good that must be sacrificed to produce an additional unit of the other good. It measures the opportunity cost of producing one good in terms of the other. Therefore, option C is the correct answer. Option A (marginal rate of technical substitution) and option B (marginal rate of substitution) are concepts related to consumer theory and not production theory. Option D (marginal propensity to consume) is related to the Keynesian theory of consumption and has nothing to do with the PPF.

The Slope of the PPF Is Equal to The