Explain the connection between opportunity cost and the PPF
What will be an ideal response?
When moving along the production possibilities frontier, more of one good or service can be obtained only by giving up another good or service. The good or service given up is the opportunity cost of the good or service obtained.
You might also like to view...
When Bo increases the consumption of Good X and decrease the consumption of Good Y, her marginal utility of
A) X falls and the marginal utility of Y will increase. B) both X and Y will decrease. C) X increases and the marginal utility of Y will fall. D) both X and Y will increase.
On the long-run aggregate supply curve
A) a decrease in the price level decreases the level of potential GDP. B) a decrease in the price level increases the aggregate quantity of GDP supplied. C) a decrease in the price level decreases the aggregate quantity of GDP supplied. D) a decrease in the price level has no effect on the aggregate quantity of GDP supplied.