Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.

-Refer to Figure 1.13 to answer this question.What is the opportunity cost of producing the first 2 tonnes of butter?
A)2 guns.
B)18 guns.
C)20 guns.
D)The answer cannot be determined from the information given.

Question

Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.
 
-Refer to Figure 1.13 to answer this question.What is the opportunity cost of producing the first 2 tonnes of butter?
A)2 guns. 
B)18 guns. 
C)20 guns. 
D)The answer cannot be determined from the information given.

Quizplus · Accepted Answer

Producing the first 2 tonnes of butter means Mendork has to give up producing 4 guns (moving from point A to point B). Therefore, the opportunity cost of producing the first 2 tonnes of butter is 2 guns per tonne of butter produced (4 guns/2 tonnes of butter).

Figure 113 Shows Mendork's Production Possibility Curve for the Only Two